China wants to fix price in RMB instead of USD

China has proposed that Bangladesh sign a loan contract on procurement of six vessels in Renminbi (RMB) instead of US dollar (USD) as part of its move to establish its official currency as an international one, officials said.
The Bangladesh Shipping Corporation (BSC) has agreed to sign the preferential loan agreement in RMB since it financially favours Bangladesh, they added.
The International Monetary Fund (IMF) in late last month agreed to add RMB (Yuan) as a reserve currency to its basket, a recognition to its strides into a global economic system mainly dominated by the US, Europe and Japan for decades.
The BSC has entered into negotiations with China National Machinery Import and Export Corporation (CMC) for buying six vessels -- three bulk carriers and three oil tankers -- with funding from Exim Bank of China.
BSC managing director H R Bhuiyan told the FE on Sunday that China nowadays prefers to extend loan in its own currency instead of USD.
"Not only the loan for BSC, China is also willing to offer other loans in RMB to Bangladesh in future," he said.
Mr Bhuiyan said the rate offered by the CMC for the conversion of USD into RMB, has been found profitable for Bangladesh. "So, we have agreed to get the loan in RMB," he added.
The BSC and the CMC signed a commercial contract under which the former will be buying vessels worth US$ 184.50 million from China.
For the conversion of loan into RMB from USD, the two companies will have to sign an addendum, the CMC informed the BSC.
Following the commercial contract, a framework agreement and a financial loan agreement are due to be signed between Bangladesh and China. The Chinese Exim Bank wants the deals to be signed by the current month, officials said.
According to officials, presently the BSC has 13 ships in its fleet. Of them, one is container ship, 10 are product carriers and two are lighterage tankers. The ships were built between 1979 and 1991 and many are in need to be replaced immediately.
Established in 1972, the BSC has been tasked with carrying bulk cargo, food grain and crude oil, chartering, tramping and feeder services, unloading and providing agency service and ship repairing.
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