Chilli Beans is shifting away from the U.S. dollar and moving supplier payments to Chinese yuan (RMB). Learn why the company is doing this, how RMB settlement works and the risks & opportunities.
Introduction
Brazilian retailer Chilli Beans — famous for sunglasses and accessories — is reducing its reliance on the U.S. dollar and moving to pay some suppliers in Chinese yuan (renminbi, RMB). The move reflects broader corporate efforts to manage FX risk and aligns with Chinese initiatives to internationalize the yuan. Here’s a clear, practical look at how it works and what it means. ExameReuters
Why the switch? (practical motives)
- Hedge FX risk: paying in RMB removes uncertainty between quote and payment in USD and reduces the need for hedging. WorldFirst Global
- Smoother supplier relations: many Chinese suppliers accept RMB; paying in the supplier’s currency simplifies transactions. Supplyia
- Policy tailwinds: China has been promoting RMB cross-border settlement and improving payment rails (CIPS), which makes RMB transactions easier and cheaper. statrys.comReuters
How RMB payments work (simplified)
- Buyer and supplier fix price and agree payment in RMB.
- Buyer sends RMB via an offshore CNH account or using banks/payment providers that support RMB. PNC Banksupport.currencycloud.com
- Settlement happens through CIPS or correspondent banks (SWIFT instructions to RMB-capable accounts). statrys.com
- Supplier confirms receipt and ships goods; letters of credit or payment guarantees can be used if required. Supplyia
Benefits vs. risks
- Benefits: price stability for RMB-quoted orders, reduced hedging costs, potential commercial advantages with Chinese suppliers. WorldFirst Global
- Risks: exposure to RMB volatility, operational and liquidity costs, and regulatory/geopolitical uncertainties that might affect RMB flows. support.currencycloud.comCarnegie para a Paz Mundial
Practical advice for suppliers and partners
- Negotiate currency clauses and define who bears FX risk.
- Consider opening an RMB-capable account or partnering with payment providers that support CNH/CNY transfers.
- Use letters of credit or contractual protections when necessary.