Maximising the release trapped cash in countries worldwide by:
- one leading corporate treasurer believes that mostly you shouldn’t accept that the cash is trapped: Often there is a process to access cash provided you approach the local authorities and take time to understand the requirements. Similarly, you may have cash on a capital account, e.g. in China. You could argue it is trapped, but is it really when you can repatriate capital through a process? Of course, cash can be really trapped – it may require a levy or charge that is unacceptable. Overall, he believes that most cash isn’t trapped. See also: Releasing trapped cash - the real truths | C&TM File
- improving cash flow forecasting so that money is unnecesssary pumping of funds into a country, see: Six success factors for a more flexible way of forecasting | C&TM File, 5 best practice tips for forecasting success and the 5 common mistakes to avoid | C&TM File
- using inter-company netting to minimise trapped cash, see: Citi pioneers Global RMB Netting Solution with Samsung Electronics | C&TM File, Inter-company netting - undervalued and underused | C&TM File
- using the on-shore money market funds if you have to keep cash locally, such as: JPM launches new on-shore RMB money market fund with unique same-day liquidity | C&TM File
- Citi’s Fernando Almansa believes corporate treasurers need to consider 1) strategic/structural solutions, e.g. legal vehicles for payables and receivables, internal companies, AND 2) tactical solutions including:
- cross-currency solutions including: cross-border interest optimisation structures
- optimisation of global liquidity through an efficient cash management structure
- cross-border pooling solution for markets that become liberalised
- regular repatriation as allowed (see Fernando’s excellent article here).
A 6th option for releasing trapped cash in China: reader suggestion
There also a very clever 6th option, if you've got the companies to do it.
Five ways for releasing trapped cash in China
At the recent Cash Management University in Paris, BNP Paribas explained how there are now five ways to release trapped cash in China: