China, Africa to see more RMB direct settlement in trade

China's renminbi (RMB) is expected to be used as settlement currency in more deals with Africa, said a Chinese banker on Thursday. With growth in trade and investment between China and Africa, more direct RMB settlement services are needed, said Qiu Zhikun, general manager of the Johannesburg branch of the Bank of China. China-Africa trade was almost 200 billion U.S. dollars in 2012, and China's trade with South Africa alone reached 60 billion dollars. Mutual investment also increased rapidly, Qiu told the first South Africa-China Capital Market Forum here. The Chinese bank has opened more than 1,000 offshore RMB clearing bank accounts in more than 80 countries over the last four years, forming a global coverage of the RMB settlement network, he said. The internationalization of the RMB is not only a national strategy but is also in line with market demand, he said. Warren Geers, general manager of bonds and financial derivatives of the Johannesburg Stock Exchange, said his agency had launched rand/RMB exchange hedging derivatives and the trading volume had been growing rapidly. Ross Meredith, head of foreign exchange sales of Nedbank, said that South Africa handled 18 percent of all RMB settlement business in Africa in 2011, and that RMB clearing business will grow substantially in the future. RMB direct settlement will help lower commodity prices and add competitive edge because settlement is simplified, said Meredith.