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Icap Launches CNH Benchmark

EBS BrokerTec and Icap Information
Services (IIS) have launched EBS CNH Benchmark, the first fully electronic,
trade-backed reference rate for the offshore Chinese renminbi (CNH) market,
according to Icap.

The benchmark is published daily at 16:30
Beijing/8:30 GMT, and is timed to coincide with the onshore renminbi (CNY)
market close.

“We chose to publish it at 16:30 Beijing/8:30
GMT for two reasons. There have been growing volumes in the Asia/EMEA
cross-over in offshore RMB trading, and we’ve seen over the past few years that
it has become an important period of time for movements in the currency market,” Asian
strategic currencies specialist team leader, Emily Bignell tells Profit & Loss.

“The benchmark supports London as the main
international centre for RMB trading outside of Hong Kong,” she adds. 
“At 16:30 Beijing time, the
onshore publishes an official CNY closing rate, which is used as part of the
calculations for the following day onshore CNY rate.”

The benchmark incorporates rates from
executed trades during the fixing window from the EBS Market central limit
order book, and uses “transparent methodology consistent with the IOSCO
Principles for Financial Benchmarks, to create a reliable and accurate daily
reference rate”, EBS says in a statement.

Some 70% of all CNH interbank activity is
traded on the EBS Market, with USD/CNH the third most traded currency pair on
the platform, the company says.



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