Citigroup Inc introduced yuan-denominated letters of credit for importers and exporters in Latin America on Tuesday, demonstrating the bank's eagerness to cash in on the current push to make the yuan a global currency.
The new product will allow traders in Latin America to work with partners in China to issue, receive and settle yuan-denominated letters of credit. It will also provide traders with alternative means of financing their trade and mitigating their risks.
"Through the launch of this RMB settlement solution in Latin America, added to our other complementary trade solutions, we are providing our clients in the most active trade corridor in the region with a unique value proposition, which addresses the fast-changing demands of international trade with China, allowing them to be a market leader and a competitive force solely through their partnership with Citi," said Othman M. Gamero, trade services head for Latin America of Citigroup.
Citigroup's new service comes as the value of trade between China and Latin America has increased greatly in recent years. In 2011, China's trade with the region increased by 32.3 percent year-on-year to reach $236.6 billion, according to data from the International Monetary Fund. The value of China's trade with Brazil, its top partner in Latin America, increased by 35.2 percent to reach $84.5 billion.
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