Bahamas Prime Minister Perry Christie has signed an agreement in principle with the President of China to allow the Bahamas to trade in the Chinese Renminbi (RMB).
Bahamas Minister of Financial Services Hope Strachan said establishing a Bahamian RMB center would significantly boost the territory and would "further cement its position as the leader in the region for financial services."
"It would also assist in increasing trade between China and The Bahamas and indeed the region by enabling China-Bahamas trade to be denominated in Chinese RMB and Bahamian dollars, rather than the current practice of using US dollars as the intermediate currency," he said.
According to the Bahamas Government, the benefits of hosting a RMB center include that:
- Currency exchange savings from direct bilateral transactions could increase China-Bahamas trade;
- The Bahamas could extend RMB settlement services throughout the region;
- Same-day or expedited currency exchange for time-sensitive transactions could be conducted;
- Bahamian importers could more easily access the Chinese market;
- New jobs would be created through settlement center operations and ancillary financial services; and
- It would strengthen the trade and investment relationship between China and the Bahamas.
Strachan said: "Already China has announced plans for the China International Payment System to process cross-border renminbi transactions which is scheduled to be launched in the fall and become fully operational by the end of year."
"As the Bahamas seeks to broaden its base of trading partners beyond the United States, building the reach and expertise of its financial sector in emerging economies like Brazil, Mexico, and China is critical."
By Courtesy of Lowtax.net
