HSBC has conducted the first Rmb-denominated trade transaction in India, marking the growing importance of the Chinese currency in world trade.

The bank has not disclosed the details of the transaction, but mentioned it was for “a major pharmaceutical company”.

Sandeep Uppal, managing director and head of commercial banking, HSBC India, says: “India-China is a very important and active trade corridor and we see the first Rmb settlement as an important milestone in the fast-growing bilateral trade between the two countries.”

Surath Sengupta, head of global trade and receivables finance, HSBC India, adds: “South-South connections are set to revolutionise the global economy in the same way that trade between the developed nations exploded in the 1950s and 1960s and we expect the 21st century to see significant trade growth between these two emerging nations. The scale of opportunity between India and China is huge and HSBC is well positioned to support trade between both the countries.”

HSBC expects the Rmb to be in the top three currencies used for global trade in the next five years, and points to the growth in India-China trade in the past few years. According to the bank, 10% of China’s US$6tn trade was settled in Rmb in Q1 2012, and this number is expected to rise to 50% by 2015.

Citi and Standard Chartered are among the other banks that have recently expanded their Rmb offering to match growing demand from clients, and just last month, the Asian Development Bank decided to include the Rmb to its trade finance programme, reducing reliance on the dollar and the euro.

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