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PBOC issue detailed implementation rules on MNCs cross-border RMB cash pools

In early November the People’s Bank of China issued a notice on the detailed implementation rules on the multinationals’ cross-border renminbi (RMB) cash pool that will be applied in June 2015. The rules include

  • the eligibility of multinationals and limits on net cross-border RMB inflows of the cash pool:  total revenue for the first half of the year of the multinationals’ domestic member firms should be no less than Rmb5 billion
  • revenue of overseas participating firms should be no less than Rmb1 billion.
  • cross-border RMB cash pools nationwide will be allowed, not just restricted to the Free Trade Zone
  • eligible multinationals outside the FTZ in China can also have an RMB cash pool 

Citi commented on how important these developments in ensuring that the RMB can now be included as a currency in international treasury management and cash pools. However, Citi stressed that it is still vital to work closely and communicate with the local People’s Bank of China and also with local banks to ensure successful implementation of such pooling arrangements.

CTMfile take: This is an important step in the RMB becoming a natural part of international liquidity management. 

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