Cross Country

July 27, 2011 (LBO) - A Sri Lankan apparel maker had made the country's first ever payment in Renminbi to a supplier in China after the Chinese currency was allowed for cross border trade, HSBC Bank which settled the deal said. "We firmly believe that this initiative will increase our cost competitiveness in the future."

HSBC said it had it is expected that 30 percent of China's trade will be settled in Renminbi in 5 years.

"We’ve been working towards completing our first RMB transaction for some time now and this represents a milestone for Sri Lanka in terms of doing business with China," Nick Nicolaou, chief executive officer HSBC Sri Lanka said.

"Given that HSBC is the biggest international bank in China, we have been able to capitalize on this opportunity.

Chamira Wijetilleke, Head of Corporate Banking said Renminbi denominated trade will continue to grow leading to a demand for such services.

On June 29 Sri Lanka's central bank allowed the use of Renminbi for cross border trade.

HSBC said MAS Intimates, a unit of Sri Lanka's MAS group had paid for knitted fabric imported from China with Renminbi. The MAS group makes lingerie for brands like Victoria's Secret and imports material from China.