Tag: RMB

RMB

Playing the Long Game in China

Despite a bearish outlook on China and its currency right now, panellists at Profit & Loss Shanghai claimed that in the long-term, the fundamentals are in place for RMB development.

While China’s economy continues to enjoy growth rates that most fully developed economies could only dream of, the slowing of this growth rate has led to negative sentiment about China from some international investors.

“The perception outside of China about China’s economic rebalancing is very critical right now,” said Ivan Shi, a director at Z-Ben Advisors.

Solving the RMB Dilemma

The Chinese authorities face a range of challenges as they seek to protect the economy in the face of downward RMB pressure.

In 2016 the Chinese authorities are assumed to have intervened in the currency markets, not in order to depreciate the RMB but actually to maintain the value of the currency.

“The consensus from economists is that there’s going to be downward pressure on the RMB,” noted Shawn Baldwin, chairman of AIA Group, on the opening panel at Profit & Loss Shanghai.

FX Trading in 2017: Plenty of Surprises to Come

Last year the FX market was highly event driven, with periods of sustained low volatility occasionally punctuated by large but episodic market moves.
Looking ahead to 2017 and there are already clearly some events set to take place that have the potential to drive further bursts of volatility, namely the invocation of Article 50 by Britain to begin its exit from the European Union and the scheduled political elections in France, Holland and Germany.
In addition, the change of policy direction expected under US Presidential-elect, Donald Trump, and the US Federal Reserve’s indication at the end of 2016 that it currently plans to raise rates three times this year are expected to be major drivers of the currency markets in the coming year.

BlackRock Selects HSBC as Custodian in China

HSBC Bank (China) has been appointed as the onshore custodian bank for BlackRock, which has been granted approval by Chinese regulators to use the RMB to directly access China’s onshore securities market.

Blackrock is the first US-based institutional investor to obtain a Renminbi Qualified Foreign Institutional Investor (RQFII) license.

The RQFII programme provides global investors with direct access to invest into China’s capital markets. In June 2016, China allocated to the US a milestone RQFII quota of RMB250 billion, the largest quota globally outside of Hong Kong.

What’s Next in the RMB Growth Story?

With new data showing that RMB trading grew 81.8% over the past three years, Galen Stops looks at the continued development of the currency and the growth of FX trading in the APAC region.

The growth of Chinese renminbi (RMB) trading in the global FX market has been well documented by a variety of sources, whether anecdotally by traders, logically by economists or quantifiably by trading venues and other data providers.

It was therefore no surprise when the latest Bank for International Settlements (BIS) triennial survey showed that the average daily turnover of RMB has grown from $120 billion in 2013 to $202 billion as of April 2016, an 81.8% increase.

IMF Amends SDR Rounding Methodology

The executive board of the International Monetary Fund (IMF) has amended its rounding methodology for determining currency amounts in the Special Drawing Right (SDR) basket. The decision, reached July 20, was in order to “make it less complex and also to more closely align the currency weights with those approved by the IMF executive board,” […]

Chinese RMB Not a Safe Haven Currency, Study Finds

The Chinese offshore convertible renminbi cannot currently be considered a safe haven currency, and neither does it appear to be on the path of becoming one, a study published by the Federal Reserve Bank of Dallas suggests. The study analyses the trends of the RMB against a set of currencies typically considered “safe haven” ones: […]

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 […]