The giant Chinese bank said its Singapore subsidiary has made a landmark transaction that will bolster the Asian city's status in the renminbi market.

ICBC Singapore, part of China-headquartered ICBC, has carried out its first onshore renminbi bond pledged repo among foreign institutions in the Chinese interbank bond market, saying this is a “landmark transaction” which adds to Singapore's status as a renminbi hub outside China.

The repo transaction – a form of short-term collateralised financing commonly used in global debt markets – was worth RMB200 million ($32 million), the bank said in a statement.  

The transaction is part of an increase to liquidity, which became even more important due to a slowdown in mainland China’s economic growth and a depreciation in the renminbi exchange rate, which had put a strain on liquidity in the currency, Zhang Weiwu, general manager of ICBC Singapore, said. This fall in liquidity had pushed up short-term market interest rates for renminbi at one point by more than 4 per cent, putting additional stress on organisations offering products and services in the currency, he continued. 

The banking group has made a point of stressing its prominent role in pushing the renminbi markets both in onshore and offshore forms, and has explained how this also fits in with its ambitions to be a significant wealth management player. (See here for a recent interview by WealthBriefingAsia of the bank.) 

ICBC is China’s largest bank and the world’s largest bank by total assets. ICBC Singapore, a subsidiary of the mainland China firm, was established in 1993.