Citi is to pilot the first renminbi cross-border treasury centre solution in the Shanghai Free Trade Zone (SFTZ). This pilot solution for Roche, one of the world’s leading healthcare companies, follows the launch of Citi’s automated renminbi cross-border pooling structure in the SFTZ.

Through Roche’s registered company in the SFTZ, Citi will be implementing a renminbi cross-border payment and receivables on-behalf-of (POBO/ROBO) structure and the world’s first renminbi netting structure. The solution will enable Roche to use its SFTZ entity to consolidate all renminbi cross-border transactions from domestic participated companies, and settle the net amount with their offshore treasury center through netting. Resulting benefits include significant improvement in the company's capital utilization efficiency, reduced cost in cross-border transaction, intra-group financing and foreign exchange, as well as an expansion of convenient and effective cross-border payment channels.

Amol Gupte, region head, treasury and trade solutions, Asia-Pacific, commented, “Regional treasury centres are the most sophisticated form of treasury management structures, and they provide enormous benefits to companies in terms of visibility, increased working capital efficiency and better risk management.”

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CTMfile take: This cross-border RMB solution is an important example of the internationalisation of the RMB. Another impact of the RMB internationalisation is that the currency is starting to fluctuate (down 0.6% in 2014 v. USD), it is no longer a sure bet to keep increasing in value. Maybe Chinese manufacturers will be less keen to be paid in RMB? SAFE - welcome to the real world.