Renminbi bond markets are converging

Offshore renminbi bond markets are increasingly converging with the onshore market, which will boost the currency's internationalisation, says Asifma.

Differences between offshore and onshore renminbi bond markets are decreasing in terms of yield spreads and clearing infrastructure, according to the Asia Securities Industry Financial Markets Association Asifma.

At a seminar on Thursday, Asifma unveiling a white paper on the currency’s roadmap - said spreads between bond yields in offshore and onshore markets have narrowed.

The average coupon on offshore renminbi bonds has moved to 3.2% in 2014, an 80bp increase from 2.4% in 2010 when the offshore markets opened. Meanwhile, the average coupon of onshore bonds is 3.8% this year compared to 2010’s 4.7%.

Foreign investors have also changed their investment strategies,...

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