The license granted by the People’s Bank of China, makes BMO the first Canadian bank to offer this capability.
Under the terms of the license, BMO’s corporate clients can now pay their foreign suppliers directly in the local currency.
BMO Capital Markets Global Head of Foreign Exchange Products and China Capital Markets Jamie Thorsen said that this will mark a significant change in the way the bank’s global clients will do business in China from now on.
"It is going to create significant cost savings, especially for our large, North American clients, who import from China and heavily rely on foreign exchange, global treasury management and trade finance products and services to grow and manage their business," Thorsen said.
Until recently, international trade in China had always been settled in US dollars.
With the goal of increasing usage of CNY in international trade settlements, the Chinese government has initiated a project known as Cross-Border CNY Settlement.
In October 2010, BMO opened its new incorporated subsidiary, Bank of Montreal (China). With local incorporation in China, BMO has the flexibility to expand its product and service offerings for North American and Chinese clients.
