People's Bank of China, Circular on Clarifying Issues Relevant to Cross-border Renminbi Transactions

中国人民银行关于明确跨境人民币业务相关问题的通知

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Pilot Rmb settlement of FDI launched.

Main contents: The Circular states that banks may issue letters of guarantee in renminbi (Rmb) for clients on the contracting of overseas projects, overseas construction projects and cross-border financing. The letters of guarantee in Rmb issued by banks and the balance of Rmb settlement bank accounts of overseas organisations shall not fall under the scope of the existing foreign debt control (Articles 6 and 7). Entrepôt trade may be settled in Rmb (Article 8).

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