The Asian Development Bank announced Tuesday on its website that it has decided to support deals denominated in renminbi and Indian rupee under its Trade Finance Program as intra-regional trade transactions using these two Asian currencies are expected to rise.
The program, which has supported over $10.6 billion in trade since 2009, used to cover only transactions denominated in US dollars, yen and euros, according to ADB.
This move will encourage the use of regional currencies in trade and reduce reliance on the US dollar as a settlement currency, which is in short supply in many countries, said Steven Beck, head of ADB's Trade Finance Program. It advances our promotion of trade in the region, which is crucial for boosting job creation and economic growth, he added.
Intra-regional trade in Asia in the next 10 years is expected to account for at least half of all foreign trade for Asian countries, according to ADB. At present, 90 percent of all foreign trade in Asia is settled in US dollars, but this percentage is expected to decline.
The Asian Development Bank Thursday revised its prediction on China's economic growth to an increase of 8.2 percent in 2012 and 8.5 percent in 2013, lower than its forecast in April.
ADB made the prediction in the newly published Asian Development Outlook Supplement. The agency predicted in April that China's gross domestic product will increase 8.5 percent in 2012, and then rise to 8.7 percent in 2013.
The ADB said China has seen a fall in net exports, industrial production, and in fixed asset investment, although government spending on health, education and big infrastructure projects should give the economy something of a boost.
As the country moves to a more sustainable growth model, growth may slow down more than expected, said the report.
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Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service