China focus: Deutsche says FX options offer better hedging opportunities

New onshore FX options allow China-based companies to employ longer-term hedging strategies.
Beng-Hong Lee of Deutsche Bank
Beng-Hong Lee of Deutsche Bank

Last week’s debut of FX option transactions in China will enable onshore companies to better hedge their longer-term currency exposures, according to Deutsche Bank’s Beng-Hong Lee, head of FX trading, China. Effective April 1, the new rules, issued by the State Administration of Foreign Exchange Safe, will allow trading of so-called European-style FX options between licensed local banks, institutions and corporations.

Options give the buyer the right, but not the obligation, to buy or sell currency at a specified exchange rate during a defined time period. European-style options can only be exercised at maturity.

“From a corporate perspective in China, this onshore FX option market is...

¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222