China’s biggest bank is showing how the banking sector can leverage on the “One Belt, One Road” initiative.
Industrial and Commercial Bank of China (01398.HK) recently launched foreign exchange services for 80 different currencies of countries along the routes covered by the regional collaboration plan.
For 20 of these currencies, ICBC offers spot, future and swap services. For the other 60 currencies that are not freely convertible, hedging products will be available.
With an increasing number of Chinese firms venturing into emerging economies along the routes of the Silk Road Economic Belt and the 21st-century Maritime Silk Road, their trading and investment activities will entail a surge in demand for foreign exchange services.
In most cases, dealing with local banks was the only option in the past.
ICBC wants to offer them a more cost-effective way to manage their forex risks, it told the Hong Kong Economic Journal.
In fact ICBC has built a network that matches the Belt and Road blueprint.
It reportedly has about 120 branches and subsidiaries along the routes.
Forex aside, the lender has participated in more than 80 related projects, involving a total financing value of US$11.6 billion.
More projects in numerous industries including electric power, gas, oil, mining, machinery, telecommunications and agriculture are expected to come on stream in coming years.
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