Malaysia’s Maybank is offering trade financing in ringgit for its customers across China through its Beijing and Shanghai branches.

The move provides Maybank’s Chinese customers and their Malaysian counterparts with a new liquid currency that has hedging options, minimizes foreign exchange exposure, and enables both parties to benefit from better trade terms and reduced supply chain costs. The financing will include letters of credit, financing of imports, exports, currency swaps and other services.

Maybank tells GTR that the bank made the move due to increasingly strengthening ties with China, evidenced through a year-on-year increase in the number of Malaysian companies trading with China. Malaysia is China’s third largest trading partner is Asia and trade between the two has increased to US$106bn in 2013, compared to US$94bn in 2012.

“Greater China is one of the key markets that Maybank has been focusing on over the last few years, especially given the growing trade and investment between the region and Asean,” says John Wong, global head of transaction banking at Maybank. Wong adds that the bank is looking at introducing more products in 2014, particularly in the area of supply chain financing that support open account trades which are the dominant form of trade in Asia.

Maybank tells GTR that because Malaysia is one of the leading commodity exporters to China, commodity companies, and especially those with opportunities based in China will be able to leverage the new opportunity. Malaysia is one of the world’s top rubber exporters, while China is the world’s top rubber buyer and consumer. Other sectors that will benefit include manufacturers of metal, chemicals, and LNG.

Maybank’s offering comes on the heels of Bank Negara offering a ringgit trade facility, through a new representative office opening in Beijing late 2013.