The Bahamas Government announced earlier today there has been an agreement with the Chinese President that would allow The Bahamas to trade in Chinese denominated currency, the Renminbi (RMB). The Renminbi is the official currency of the People’s Republic and literally means “people’s currency”. Chinese currency generally is referred to also as the Yuan, a basic unit of the Renminbi. As a result of the internationalization of the renminbi, it is estimated to be the world’s 8th most traded currency.

BFSB CEO Aliya Allen said today, *“Though details are being negotiated, The Bahamas is set to become only the second recognized hub for Renminbi trading and settlement in the Americas. This acknowledges not only the strength of the diplomatic relationship and friendship that exists between the Bahamas Government and the Chinese Government but also of their confidence in The Bahamas’ financial infrastructure that has been refined and developed over the course of 80 plus years.”*
She further noted that apart from ensuring opportunities for trade and trade financing, it is a glowing endorsement of The Bahamas’ financial infrastructure for settlement and clearing and supports the jurisdiction’s capacity and burnishes our reputation as a major financial centre. *“There are a myriad of opportunities. We would be mentioned in the same breath as Toronto, Singapore and Hong Kong and we would be the second yuan hub in the Americas. We have always supported the initiative as seen by our facilitation of major Landfall events last year in Beijing and Hong Kong and we congratulate the Ministry of Financial Services and the Government of The Bahamas on the agreement in principle.”*

Apart from encouraging more trade relationships and exports given the ability to settle in Renminbi, there is the potential for Bahamas institutions to invest directly in yuan denominated bonds and securities without the downside of conversion.

The CEO continues, *”Chinese investors and institutions are likely to view The Bahamas as a much bigger financial player and the international and global banks that want to access Chinese clients wishing to transact in their own currency will undoubtedly recognize that being 30 minutes from Florida, in a time zone the same as New York with access to both Latin America and Asia facilitated by the Renminbi hub, is a very attractive proposition”.* The Bahamas has long recognized that it could act as a bridging gateway between South America and Asia utilizing its depth of expertise in financial services to facilitate trading relationships and trade finance. *“With this recent announcement, we are very close to making this a reality”*, says Ms. Allen.

The Government confirms that this brings to fruition years of hard work by the Ministry of Financial Services in negotiating this arrangement with the Chinese government. *“The Ministry of Financial Services had been meeting for the last two years with Chinese authorities to develop this new financial market, and was a topic of discussion and negotiation on the most recent visit to China by the Ministry of Financial Services late last year.”*

The Prime Minister and a ministerial delegation are in China this week to attend the China/CELAC (Community of Latin American and Caribbean States) Forum, where he will deliver his inaugural address as CARICOM Chairman tomorrow. The Bahamas will host the Intercessional Meeting of the Heads of Government of CARICOM on February 26-27.

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