Use of Chinese currency could help safeguard region’s access to global finance

14 Jul 2017

As global financial institutions continue to withdraw banking services from the region, the Chinese renminbi could help to safeguard the region’s access to global financial services. This was one of the topics explored at a conference hosted by Caribbean Development Bank (CDB), held under the theme ‘Chinese Renminbi in the Caribbean: Opportunities for Trade, Aid and Investment’.

“The conference comes at a time when the ability of many Caribbean countries to engage in international trade and financial services is being undermined by the withdrawal of correspondent banking services by North American and European financial institutions. An urgent resolution of the dilemma is required,” said CDB, Dr Warren Smith.

Smith also highlighted the partnership between China and the Caribbean, which has been growing in recent decades.

“China has itself been successfully undergoing major economic transformation built on the win-win strategy of opening-up for common prosperity. It is that strategy that helps to explain the strengthening of China-Caribbean diplomatic ties and our increasing engagement in the areas of investment, contracted projects, and bilateral trade over the past two to three decades. One of the spin-off benefits of the transformation taking place in China is the rapid internationalisation of the renminbi, starting in 2006 with the floating of the exchange rate,” he said.

The conference also explored the opportunities for deepening trade between China and the Caribbean and how greater use of the renminbi, which is now an International Monetary Fund (IMF) reserve currency, could facilitate greater foreign direct investment from China into the Caribbean.