The internationalisation of the renminbi is gaining momentum, with bourse operator Hong Kong Exchanges and Clearing announcing it will begin trading futures on the currency.
HKEx says it will launch a US dollar/renminbi contract in the third quarter to give investors a hedge against their exposure to the Chinese currency, referring to the US dollar and renminbi traded in Hong Kong.
The contract will be quoted in renminbi per US dollar, or US dollar and margined in renminbi, with the trading and settlement fees also charged in renminbi.
“This initiative is part of our strategy to expand beyond equities and equity-related derivatives, offer a wide range of RMB-traded products and take advantage of the opportunities we see in fixed income, currencies and commodities,” says Charles Li, chief executive of HKEx. “It also reflects our desire to support Hong Kong’s further development as an offshore RMB centre.”
According to the proposed contract specifications, the contract month of the renminbi currency futures, under the trading symbol of CUS, will be spot month, the next three calendar months and the next three calendar quarter months. The contract size will be $100,000.
Exchanges globally have increasingly turned their attention to China as the central bank pushes for broader international use of its currency in all asset classes.