JP Morgan has received approval to provide renminbi (RMB) cross-border trade settlement services to China-based corporate clients as a domestic settlement bank through its locally incorporated bank. JP Morgan Chase Bank (China), Shanghai Branch is authorised to originate and receive payments in RMB to settle trade transactions for eligible corporates. The bank now offers import letter of credit (LC) issuance and payment; export LC advising, negotiation and confirmation; and standby LC or bank guarantee issuance in RMB.
“With RMB international trade settlement, JP Morgan is able to help its Chinese corporate clients mitigate the higher level of foreign exchange risk they face as a consequence of recent turmoil in the domestic markets. These fluctuations have resulted in lower returns on foreign currency investments,” said Dani Cotti, global trade executive, JP Morgan Treasury Services.
With this announcement, JP Morgan moves another step closer to delivering a full suite of RMB cross-border clearing and settlement services. In September 2009, JP Morgan’s Hong Kong branch received authority to originate and receive payments in RMB to settle applicable trade transactions with approved corporates based in mainland China.
JP Morgan Chase Bank (China), Shanghai Branch also has filed for authority to become a ‘domestic agent bank’ to provide RMB clearing services to JP Morgan Chase branches as well as financial institution clients in eligible countries.
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