Chinese banks have been active in transacting yuan cross-border settlement after the first deal was made on Monday.

The Industrial and Commercial Bank of China (ICBC) said on Tuesday it had dealt with yuan cross-border settlement totaling 17 million yuan (US$2.49 million) in two days.

Many banks in Guangdong Province were active in dealing with yuan cross-border settlement. The Bank of China Guangdong branch transacted yuan cross-border settlement totaling 7.96 million yuan (US$1.17 million) on Tuesday.

"Guangdong Province has a large economic scale and is highly dependent on foreign trade. Yuan cross-border settlement could help enterprises avert exchange rate risks and reduce costs," said Cao Licong, deputy governor of the BOC Guangdong branch.

"The service is favored by enterprises and will be promising in the future," said Hu Ye, deputy governor of the ICBC Guangdong branch.

China launched its first yuan cross-border settlement on Monday.

China's State Council, or Cabinet, announced in April a pilot program to allow exporters and importers in Shanghai, and southern Guangzhou, Shenzhen, Zhuhai and Dongguan cities to settle cross-border trade deals in Renminbi (RMB), or yuan.

China last week issued detailed regulations for the pilot program for cross-border trade settled in yuan. The rules specified how to make transactions using yuan to settle trade with Hong Kong and Macao and regional trade partners.

(Xinhua News Agency July 8, 2009)