HSBC Bangladesh executed its first Renminbi (RMB) denominated cross-border export settlement for Avant Garde Fashion Ltd, a company based in the Dhaka Export Processing Zone.

The transaction -- said to reduce transaction costs and hedge foreign exchange risk -- comes at a time when Bangladesh's exports to China are expected to grow, according to HSBC's Global Connections report, by 15 percent a year between 2013 and 2015.

A survey recently conducted by HSBC in China found Chinese companies were willing to offer better pricing or terms in return for using the yuan to settle trade.

“Bangladeshi businesses doing international trade with China are starting to realise the significant monetary benefits of settling their trade in RMB. HSBC Bangladesh has achieved a significant milestone,” said Noel Quinn, HSBC's Asia-Pacific head of commercial banking.

HSBC's Global Connections report expects Chinese merchandise exports to grow most rapidly with other Asian economies: 15 percent annually from 2013 to 2015, compared to 12 percent globally in the same period.

Andrew Tilke, chief executive officer of HSBC Bangladesh, foresees trade between Bangladesh and other Asian countries, especially China, growing significantly.

"HSBC sees the future of intra regional trade growing and China is going to be one of the major drivers, with its currency RMB playing a significant role," said Md Mahbub-ur-Rahman, head of HSBC Bangladesh's commercial banking.

News: The Daily Star/Bangladesh/22-Nov-12