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ICBC Yangon branch joins China's CIPS to boost RMB usage in Myanmar trade

EditorAmbhini Aishwarya
Published 03/11/2023, 06:46
© Reuters.

The Industrial and Commercial Bank of China (ICBC) Yangon Branch's inclusion in China's Cross-Border Interbank Payment System (CIPS) marks a significant stride towards reducing Myanmar's dependence on the US dollar for international transactions. This move aligns with the Central Bank of Myanmar's strategy, backed by the Junta’s Foreign Currency Supervisory Committee, to promote other currencies such as the Chinese yuan and Russian ruble.

The policy has resulted in a mandate for Myanmar traders to use yuan in cross-border transactions with China. As a result, ICBC Yangon Branch is among the first banks authorized to offer comprehensive RMB financial services for China-Myanmar border trade. By integrating the CBM Net System with CIPS, local banks can participate indirectly in cross-border transactions using yuan, providing an alternative to SWIFT.

The use of yuan is also being promoted in the clearing process of China-Myanmar trade and Belt and Road Initiative projects. The regime is further encouraging the use of yuan, baht, and rupees in border trade and is seeking direct payments in ruble and kyats with its major arms supplier Russia. However, it should be noted that border trade has been temporarily halted due to conflict in northern Shan State.

This significant development was marked by a ceremony on Wednesday at Myanmar's commercial hub, which was attended by over 50 attendees, including government and banking officials, businesspeople, and media representatives from both countries.

The inclusion of ICBC Yangon into CIPS is aimed at bolstering RMB usage in border trade transactions between China and Myanmar. The bank now offers comprehensive RMB financial services—including account opening, deposits, settlements, financing, foreign exchange—to clients from both nations. According to Than Than Swe, the Central Bank of Myanmar's governor, this development is projected to accelerate cross-border payments and substantially increase bilateral trade, investment, and cash flow.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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