Cash & Liquidity Management In Asia-Pacific

There are some 40 countries in the Asia-Pacific region ranging from some of the poorest to rich countries like Japan and New Zealand. There is also a major difference between the countries' cash and liquidity management infrastructures, payment system and exchange controls ranging from restrictive and under-developed to some of the most advanced and open environments.

The fast-growing economies - China and India - are making Asia-Pacific an economic power-house, and, not surprisingly, banks and other cash management providers are focusing much of their cash and liquidity management developments on Asia-Pacific.

There are some 10 banks that offer regional liquidity management using various combinations of sweeping and pooling, most of which include partner banks. The number of countries that can be covered by such ICM solutions is limited. 

Main Developments
The main developments in liquidity management solutions covering the 18 main Asia-Pacific currencies over the last 2-3 years have been:

  • the wide spectrum of regulatory environments from fully liberalised markets such as Australia, Hong Kong and Singapore to extremely restricted markets, including China, and Malaysia is unchanged
  • how technology is being used to provide greater visibility of cash
  • where liquidity is trapped, for example, by exchange controls, inter-company transfers, dividend payments and interest optimisation are being used to move liquidity
  • the increasing integration of liquidity management structures and global supply chains
  • global treasuries are increasingly being located in Asia-Pacific using against the sun liquidity sweeping to the central treasury in Asia-Pacific.

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