Citibank announced yesterday that it is among the first overseas banks allowed to sell foreign currencies to Chinese mainland residents. The approval from the State Administration of Foreign Exchange has broken the homegrown lenders' dominant status in this area.

Citibank said in a statement that local residents can buy nine foreign currencies - Australian dollars, Canadian dollars, Swiss francs, euros, British pounds, Hong Kong dollars, Japanese yen, Singapore dollar and US dollars - at its branches in Shanghai.

The Hongkong and Shanghai Banking Corp Ltd, Standard Chartered Bank and the Bank of East Asia have also received similar approval to offer the service to local residents, industry sources said.

"With the growth in the number of Chinese going abroad for travel, study or work, a large demand has arisen for foreign currencies," said Citibank in a statement yesterday.

The number of people traveling in and out of the country has been increasing over the last 13 years. In 2002, the increase was 48.2 percent over the previous year, said the Bureau of Exit & Entry Administration in the Ministry of Public Security, without giving absolute numbers.

In China, people can buy a limited amount of foreign currencies only when they are going to study, travel or work in other countries and regions.

The potentially huge business of selling foreign currencies was dominated wholly by the Bank of China before April 1, 2002, when the government permitted another two domestic lenders - the Industrial and Commercial Bank of China and CITIC Industrial Bank - to join the business.

In October last year, SAFE announced that all lenders on the Chinese mainland, including overseas banks, can apply to sell foreign currencies to the mainland residents.

(eastday.com August 28, 2003)