SINGAPORE - The Monetary Authority of Singapore (MAS) on Friday welcomed the move by the People's Bank of China's Chongqing Operations Office (PBOC Chongqing) that will allow eligible corporates and individuals in Chongqing to conduct cross-border renminbi transactions with financial institutions and corporates in Singapore.

PBOC Chongqing's directive will allow corporates in Chongqing to issue renminbi bonds in Singapore and repatriate the funds raised in full. The funds raised can be used in and outside of Chongqing for the development of economic activities and infrastructure in China's western region, said a MAS press release.

The directive will allow equity investment funds in Chongqing to make direct investments outside of China, including Singapore and the ASEAN region. Individuals in Chongqing are also allowed to make renminbi remittances to Singapore to settle current account transactions.

MAS said that the initiative will facilitate greater use of renminbi in the region and contribute to the growth of the offshore renminbi market in Singapore. It will also strengthen financial connectivity between China's Chongqing and Singapore.

"This will be useful in achieving the objective of enhancing modern connectivity and services in China's western region under the China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity, announced in November 2015." said MAS.