One month in and it’s a case of so far so good for the China International Payment System (CIPS), even allowing for limitations in operating hours.
Offshore renminbi has passed another milestone, becoming the first non-CLS settled currency to be tradeable on ParFX – but China’s regime of exchange-rate controls still casts a long shadow over the market’s infrastructure.
Brics take the road less travelled
Emerging markets are working for a multipolar monetary world. Beijing is spearheading the push to establish rivals to the World Bank to globalize the renminbi, establish markets for its excess capacity and plug the infrastructure deficit. But, for now, a post-Bretton Woods era is fantasy.
Asia’s corporates mature and refine treasury
“The relevance of RMB has grown over the past four years from the trade settlement perspective. It will start to eat into the market share of other currencies.”
China’s shock RMB devaluation is unlikely to influence the Federal Reserve’s decision to hike, or otherwise, in September, but it could shape the path of subsequent increases, say analysts.
China: Stock meltdown prompts market intervention
Foreign investors pull Rmb40.5 billion in two weeks; average P/E ratio still 66 times.
Markets adjust to new RMB normal
Analysts foresee a surge in corporate FX hedging activity, onshore and offshore RMB spreads to normalize, and a dip in dim sum issuance after the RMB’s shock adjustment.
China stuns markets with sudden currency devaluation
Everyone knew a revaluation of renminbi was coming sooner or later, yet China’s announcement, including reform of the dollar fixing mechanism, caught many off guard. The move left observers debating whether it was stimulating its economy or acquiescing to calls for exchange-rate liberalization.
Inside investment: Rights and responsibilities of the renminbi
China’s bid to join the currencies in the IMF’s SDR basket is more than a footnote of interest only to economists. Policymakers should take note.
Interdealer brokers: IDBs bet on RMB boom
Renminbi internationalization a big opportunity; commodities counterbalance bank retreat.
Dim sum bond issuance slumps as renminbi globalization struggles to gain traction
Recent data suggest that the momentum of the renminbi is slowing, particularly outside Asia.
RMB usage hampered by expertise, liquidity deficit
The internationalization of the renminbi could be further turbo-charged if knowledge and liquidity concerns were addressed, according to a new study on corporates’ views of the Chinese currency.
RMB depreciation expectations shift trading strategies
As China gradually loosens its grip on its FX regime, an ostensibly overvalued RMB is expected to fall back in line with global currencies, presenting a range of opportunities for traders, ranging from USD/CNH spot positions and the options market, to punts on the CNY-CNH differential.
Stronger RMB, stronger China
China’s currency might look overvalued, but that is only half the story.
RMB: Banks staff up to match rise of Chinese currency
The need of banks to raise awareness and staffing levels around the renminbi within their own organizations looks set to be key as the battle for business heats up.
Rising dollar makes renminbi second-most overvalued currency
What goes up must come down, even the renminbi. Having appreciated by more than 30% since 2008 against a trade-weighted basket, there is growing consensus that 2015 will see further falls in the Chinese currency.
Trade finance: RMB expansion catches up with China GDP
Capital controls have constrained the use of the renminbi in global trade, while China’s real economy has surged ahead. Despite the strict rules around its use, market players are punting on strong RMB growth in 2015, Euromoney’s Trade Finance survey reveals.
Challenger banks and RMB to shape year ahead
The continued internationalization of China’s currency and the emergence of challenger banks is set to define transaction banking in 2015.
Rise of RMB trading shows little sign of slowing in 2015
Despite depreciation risk next year, amid the global currency war, market players say the battle between RMB offshore financial hubs and trading volumes will go from strength to strength.
Hong Kong-Shanghai Stock Connect enables CNH funding arbitrage
The Hong Kong-Shanghai Stock Connect, which was launched amid much fanfare on November 17, has triggered a jump in CNH-funded arbitrage opportunities. However, rising Stock Connect volumes and easing by the People’s Bank of China – triggering a convergence between onshore and offshore rates – will remove current funding advantages.
South Korea battling for RMB spoils
Backed by its robust trading relationship with China, the east Asian nation is the latest fledgling offshore renminbi hub. Market participants shed light on South Korea’s renminbi bid as internationalization of the Chinese currency gathers pace.
IFC plans offshore RMB duration play
Buoyed by its Indian success, the World Bank’s private-sector arm the International Finance Corporation (IFC) has set its sights on further extending the offshore renminbi curve.
RMB: China vs the world
The prospect of fierce competition between Chinese and western banks for international RMB business strengthens.
Pulse Survey: Renminbi’s internationalization continues apace
When it comes to the difficulties in liquidity management faced by treasurers operating in China, 21.3% say renminbi cash-pooling is top of the list of issues.
Percentage of cross-border trade settled in RMB
|Source: Euromoney Research Group|
RMB-sterling trading gets off to a flying start
Bankers are already seeing demand for direct renminbi-sterling deals, and anticipate a rise in volumes and market makers, since the announcement on Thursday it is now possible to directly trade these two currencies in China’s onshore interbank foreign-exchange market.
Corporates take cautious stance on RMB adoption
While renminbi trade flows between mainland China and emerging markets continue to grow, many domestic and western corporates remain reluctant to trade in the Chinese currency.
Transaction services guide 2014: Redback rising
The renminbi’s meteoric rise as a payments and trade currency has brought it closer to becoming mainstream than ever before. Precisely when this will happen is anyone’s guess. That it will is inevitable.
|World payment currencies vs. trade
Global share (extra-regional trade only for Europe)
|Source: WTO, Swift, Standard Chartered Research|
RMB to be a top-five payments and trade currency in three years – ICBC
The renminbi has risen dramatically as a world payments and trade-settlement currency in the past three years. According to the Chinese bank ICBC, it could become a mainstream international currency as soon as 2017.
RMB two-way volatility a key hedging challenge
Damian Glendinning, Singapore-based group Treasurer at PC maker Lenovo, sees two-way volatility in the renminbi (RMB) as a key hedging challenge for the company, and for the market, in the coming period.
Eurozone’s first RMB clearing hub in Frankfurt faces London competition
Though Germany lacks sizeable RMB deposits and liquidity, Frankfurt is well-positioned to intermediate trading flows between China and the eurozone, but it lacks London’s financial depth.
Capital controls in China are broken; Beijing faces a new ‘impossible trinity’
The sharp jump in cross-border lending to China in recent years means capital controls are de facto broken. As a result, Beijing faces the “impossible trinity” – an inability to manage exchange rates, monetary policy and allow for free movement of capital, all at the same time. China faces an renminbi-policy crisis just as much as a potential credit crisis.
Battle for European RMB trading hub supremacy intensifies
Competition among European financial centres to be the main renminbi trading hub is intensifying after the Bundesbank and Bank of England struck agreements with China to clear and settle payments in the currency.
Decline of yuan-way bets triggers financial stability fears
The longstanding one-way bet on USDCNY has been in disarray, but worse might be to come, as China looks to its FX regime to cope with credit issues, and likely defaults this year, threatening volatility in the structured-product market.
Jury out on renminbi trading band
A shock policy-driven fall in the onshore spot rate has ignited speculation that a widening of the exchange-rate band is on the cards, while others are unsure the ‘two-way’ volatility presages a structural shift.
Transaction banks step up to multinationals’ RMB liquidity challenge
Deutsche Bank has become the latest bank after Citi and HSBC to launch a service enabling the movement of renminbi-denominated cash between onshore and offshore accounts, crucially boosting companies’ liquidity in the currency.
Offshore renminbi: Bank of China CEO gives London edge over Luxembourg
CEO’s endorsement big boost to the City; renminbi bond issuance globally at record levels.
International renminbi update: Luxembourg 1, London 1
London and Luxembourg are at loggerheads to become Europe’s leading offshore renminbi hub – although they wouldn’t let you know it.
Market is bullish on renminbi internationalization amid China wobbles
Concrete advances towards the full tradability of the Chinese currency are at last seemingly being made, helping to rebalance the country’s growth model but heaping on short-term risks to China’s economic and financial stability.
London the offshore renminbi centre of choice in west, says Bank of China
As competition between financial hubs heats up, London’s ambition to become the western destination of choice for offshore renminbi received a boost from crucial market players this week, following a flurry of successful renminbi-related developments in the City.
The stock market impact of China’s reforms
The country faces many problems in banking, real estate, consumption and demographics that cannot be quickly solved.
Renminbi offers bright spot amid global trade finance slump
The renminbi’s impressive rise this year as a global trade finance currency is a positive development for a critical market that has been buffeted hard in recent years by limp demand and financial regulation.
London-China ties strengthen as China Construction Bank touts UK business
With extended opportunities for UK investors in China through programmes such as the RQFII scheme, China Construction Bank opened its doors this week to London-based investors, signalling the strength of the Sino-UK relationship.
Renminbi second only to dollar in trade finance
The renminbi has overtaken the euro to become the second most-used currency in trade finance, according to Swift, the financial messaging service.
Renminbi as world trade finance currency in value
At its Third Plenum, the Communist Party communicated its commitment to economic change. The country’s first free trade zone, in Shanghai, will act as the test bed, but without clarity on any number of policies, will international firms rush to set up shop?
Four challenges facing Shanghai free-trade zone
FX investors should look east; China could taper before the Fed
For all the focus on the Federal Reserve’s plans to start tapering its asset purchases, currency investors should also be looking at developments in China.
China’s latest swap agreement will facilitate trade
Swap agreement reflects growing trade; London has competitive advantage.
US Treasury renminbi undervaluation claim disputed
The US government has upped the ante in its criticism of China’s foreign exchange regime, but Lombard Street Research reckons the renminbi is, in fact, overvalued by 30% on a trade-weighted basis, citing, in part, rising unit labour costs and disinflationary pressures.
Cash management: A revolution in cash for China
Demand for sophisticated cash management services in China is rising as the authorities press for greater business efficiency at home and Chinese corporates expand their foreign operations. Renminbi liberalization is another driver.
International RMB: Luxembourg 1 Rest of Europe 0
London should be wary of the Duchy’s ambitions to become Europe’s RMB hub.
Foreign investors wary of China onshore risks
The preferred method for playing Chinese credit markets remains the dim sum bond market, say analysts, as China’s expansion of access to its onshore market is met with a cool reception by foreign investors.
Emerging market FX growth underperforms broader market
Emerging market (EM) currencies are expected to continue to expand their share of the $5.3 trillion-a-day global forex market despite the turmoil, with China’s RMB leading the charge.
China RMB debate: The renminbi’s road to full internationalization
Euromoney’s debate involving leading executives in Asian financial services throws light on the Chinese currency’s progress to full international status and the likely developments that will hinder and advance the process.
Renminbi overvalued by 30%; China macro risks rise
The appreciation of China’s renminbi in the face of deteriorating economic fundamentals and global disinflation represents a new normal in China’s political economy, but opinion is split about whether the currency is overvalued.
Currencies the best way to hedge against China crash
Investors looking to insure against the probability of a hard landing in China should look to the currency market.
China: People’s Bank stays firm to calm fears
Funding squeeze reaches peak; PBoC to safeguard stability.
London underlines offshore RMB credentials
London’s role in the global RMB market grew substantially last year, with business volumes and the number of renminbi products provided by London-based banks on the up, according to a new report.
China’s FX carry trade: the next shoe to drop?
For FX investors witnessing the volatility in high-yielding currencies, it might seem a strange time to warn about the potential bursting of a carry trade bubble, but one has managed to slip under the radar.
US falls behind the curve as China pushes forth with internationalization of the RMB
Chinese banks: too big to compete
Renminbi a better focus of currency hostilities
Nominal GDP targeting – a new method in the Chinese monetary policy madness?
China: Cash management revolution under way
Special focus: Currency wars
Renminbi: Why not swap?
Lack of single benchmark hurting offshore RMB
Sources: Bloomberg, TMA, ANZ
F is forward rate; S is spot rate; d is the number of calendar days for day count adjustment; t is tenor and t=0 is spot.
Start planning now for RMB internationalization
How to get your money out of China
China’s government expands the role of the RMB
|Source: China Law and Practice|
Inside investment: Nudging 1.3 billion Chinese
Foreign exchange: Depreciation hampers renminbi
Hong Kong: Chan outlines risk and reward for Hong Kong
Taiwan agreement opens the gate for Chinese investment
Correlation of RMB to China composite
RMB payments grow 17.4 times
Growing international adoption of RMB payments
|Source: Capital Economics|
Dim sum bond market shows signs of maturity
Taiwan: Cross-strait banking plans to bear fruit
Will UK/HK renminbi deal make a difference?
China: Investors lose appetite for dim sum
CME adds renminbi to alternative collateral
Hong Kong launches renminbi gold trading
CME Group to launch new RMB FX products
Deutsche Bank unveils massive expansion in China
Zhou stays firm amid China’s challenges
China starts onshore options market
Asia’s financial regulators bolster FX barriers
World Bank taps dim sum
Dim sum market is a side dish
China: Government AMCs to become new conglomerates
Renminbi comes to Africa
Chinese reform: Renminbi moves to a sweeter spot
Everything you always wanted to know about RMB but were afraid to ask
A new bond market
Chinese reform: Renminbi moves to a sweeter spot
FX: Two sides of the renminbi coin
Renminbi: Trading places
Two steps towards internationalized renminbi
NPLs: China’s trillion renminbi problem