Deutsche Bank says new HKMA rules to boost offshore renminbi

Deutsche Bank expects the new rules to improve the efficiency of renminbi clearing and encourage banks to expand their renminbi FX derivatives businesses.

The Hong Kong Monetary Authority’s HKMA announcement last Friday about further refinements to existing offshore renminbi or CNH market regulations in Hong Kong is highly significant, both with regard to its implications for the development of the offshore renminbi market as well as its impact on CNHCNY market dynamics, according to Deutsche Bank’s CNH Market Monitor.

“We think that the new regulations to enable intra-group consolidation of trade-related renminbi positions will help to facilitate the global expansion of renminbi trade settlement,” said the bank. “The net open position NOP rule changes will increase the capacity to which Hong Kong banks can expand their CNH foreign exchange derivatives businesses. In...

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