By NATARIO McKENZIE
Tribune Business Reporter
The Bahamas Financial Services Board’s (BFSB) top executive last night described the Bahamas’ potential designation as a trading hub for the Chinese currency as a “monumental achievement”.
Aliya Allen was reacting after the Government yesterday reported that the Chinese president, Xi Jinping, agreed “in principle” that Beijing would allow the Bahamas to be a country where debts involving international parties can be settled.
Following a 30-minute meeting with Prime Minister Perry Christie, the Chinese president was also said to have approved the Bahamas becoming the third jurisdiction to trade in Chinese denominated currency, the Renminbi (RMB) Chinese yuan.
“While we don’t have details about the terms, if the Bahamas is established as a trading hub for Renminbi, this is a monumental achievement and is encouraging for the financial sector of the Bahamas,” Ms Allen said.
“Apart from ensuring opportunities for trade and trade financing, it is a glowing endorsement of the Bahamas’ financial infrastructure for settlement and clearing, and supports our capacity and burnishes our reputation as a major financial centre.
“There are a myriad of opportunities. We would be mentioned in the same breath as Toronto, Singapore and Hong Kong, and we would be the second yuan hub in the Americas,” she added.
“We have always supported the initiative, as seen by our facilitation of major Landfall events last year in Beijing and Hong Kong, and we congratulate the Ministry of Financial Services and the Government of the Bahamas on the agreement in principle.”
The Government’s initial announcement on the outcome of Prime Minister Perry Christie’s talks with the Chinese president created confusion, after something became ‘lost in translation’ between Nassau and Beijing.
The first version of the release said the Chinese leader had agreed that the Bahamas could become a jurisdiction where the trading of residential mortgage backed securities (RMBS) could take place, someone having seemingly confused this acronym with the ‘RMB’ for Renminbi.
Once the matter was corrected, the Government touted the developments as positive for the financial services sector, which it said stood to benefit substantially.
It said the Ministry of Financial Services had been meeting for the last two years with Chinese authorities to develop the Renminbi currency trading market, which was a topic of discussion and negotiation late last year.
It is likely that much work remains to be done to brig yesterday’s agreements to fruition, as the 30-minute meeting will have likely only agreed the concept, leaving others to work out the details and implement them.
The Prime Minister and his delegation are in China this week to attend the forum between Beijing and the Caribbean/Latin America.
It is also pursuing a number of projects and initiatives on behalf of the Bahamian people. These projects include a reciprocal air services agreement involving Air China and Bahamian registered airlines; an indoor stadium for youth development; an agreement on technical and research cooperation between the Bahamas Agriculture Marine Science Institute (BAMSI) and China’s Ocean University and other investment opportunities.