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Cross-border RMB Pooling in China

- In November 2014, the People's Bank of China (PBOC) issued the Notice Regarding Centralised Cross-border RMB Operation by MNCs (Circular Yinfa [2014] No. 324),which allowed RMB cross-border pooling to be implemented nationwide.
- In September 2015, PBOC issued the Notice on Further Facilitating Two-way Cross Border RMB Pooling Business for MNCs (Circular Yinfa [2015] No. 279), which eased the requirements for the use of RMB cross-border pooling as well as the capital inflow cap.
- Two-way RMB sweep is allowed for both domestic and overseas group companies up to the total amount of enterprise’s self capital except financing funds.
- RMB cross-border pooling scheme can be introduced to improve global fund efficiency of a group company.

However, a new management framework will be required for both banks and user companies.
Please contact your branch office for implementation, as some conditions will apply.

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Overview

Company A has conducted the intercompany loan(yen) for the subsidiary in China. In a bit to hedge the risk of increasing valuation losses in case of yen's appreciation on the subsidiary side, It also has put another balance sheet hedge transaction(foreign exchange transactions on both side of balance sheet with changed period) in place on the Head office side.

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