The Future of The RMB - Special Focus - Euromoney Magazine

8/24/2016 The future of the RMB: special focus /Euromoney magazine
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The future of the RMB: special focus

Friday, August 12, 2016
An in-depth guide to global currency wars; how Beijing is seeking to globalize the renminbi, through currency swaps
and trade-financing facilities; the rise of the offshore bond market; and how fee-hungry banks are salivating at the
prospect of the RMB’s growth.
China: special focus
Bric: special focus
Emerging markets: special focus
China retail gold survey 2016: China steps towards gold dominance
August 2016
"For China, the strategic mission of gold lies in the support of renminbi internationalization."
MSCI decision tells China it can’t always get its own way
June 2016
Wednesday’s decision by MSCI to delay membership for Chinese A-shares in the MSCI Emerging Markets Index serves a
number of purposes.
http://www.euromoney.com/Article/3107796/ThefutureoftheRMBspecialfocus.html?printrequest=true 1/24
Asia: China's moment of truth

April 2016
Wherever you look in the Chinese economy there are mixed messages, not least in the recent history of the renminbi.
China’s muddled FX policy sows reform doubts

March 2016
China has reportedly drafted a Tobin tax on foreign currency transactions – just the latest in a series of measures that
appears to backpedal on financial reform. However, bulls say it’s a classic move by Beijing to limp towards reform without
subjecting domestic markets to volatility.
China A-shares set for MSCI index breakthrough
March 2016
QFII reforms will open up access to domestic stocks; China will have big weighting in EM index.
Emerging markets: Big trouble from brittle China

February 2016
The January fall in emerging market currencies, the exodus of foreign capital and a global
bear market in equities all point to a new financial crisis. How China reacts to this threat
holds the key for emerging markets.
Beijing seeks to allay fears of China crisis

February 2016
Market and currency turmoil weigh on growth; financial and stock market reforms needed.
China: Currency contortions threaten dim sum

February 2016
Gap between onshore and offshore exposed; Hong Kong dim sum market in doubt.
Against the tide: China’s bumpy ride

February 2016
Stock markets dropped sharply at the beginning of this year, driven by the apparently accelerating slowdown in the
Chinese economy and the slide in the Chinese renminbi.
Economists sombre on China monetary trap

December 2015
Dollar dominance continues; RMB inclusion in IMF reserve basket symbolic.
China's international payment system gathers steam

November 2015
One month in and it’s a case of so far so good for the China International Payment System (CIPS), even allowing for
limitations in operating hours.
Chinese corporates reassess FX hedging
November 2015
Having done well from their exposure to the RMB during the past decade, the currency’s surprise devaluation in mid-
August should force Chinese companies to brush up on hedging strategies that were rusty at best, but many are instead
simply focusing on opportunistic borrowing strategies.
China's balancing act on exchange rate
October 2015
China's quarter-point rate cut last Friday is the latest attempt to revive a flagging economy. But although currency
liberalization is on the agenda in the longer term, the People's Bank of China is unlikely to be ready to cede control of the
renminbi’s de facto dollar peg just yet as depreciation pressures grow.
RMB: ParFX offers USD/CNH trading

October 2015
Offshore renminbi has passed another milestone, becoming the first non-CLS settled currency to be tradeable on ParFX –
but China’s regime of exchange-rate controls still casts a long shadow over the market’s infrastructure.
Brics take the road less travelled

September 2015
Emerging markets are working for a multipolar monetary world. Beijing is spearheading the push to establish rivals to the
World Bank to globalize the renminbi, establish markets for its excess capacity and plug the infrastructure deficit. But, for
now, a post-Bretton Woods era is fantasy.
Asia’s corporates mature and refine treasury

September 2015
"The relevance of RMB has grown over the past four years from the trade settlement perspective. It will start to eat into
the market share of other currencies."
Markets mull RMB devaluation and Fed policy link
August 2015
China’s shock RMB devaluation is unlikely to influence the Federal Reserve’s decision to hike, or otherwise, in
September, but it could shape the path of subsequent increases, say analysts.
China: Stock meltdown prompts market intervention

August 2015
Foreign investors pull Rmb40.5 billion in two weeks; average P/E ratio still 66 times.
Markets adjust to new RMB normal

August 2015
Analysts foresee a surge in corporate FX hedging activity, onshore and offshore RMB spreads to normalize, and a dip
in dim sum issuance after the RMB’s shock adjustment.
China stuns markets with sudden currency devaluation

August 2015
Everyone knew a revaluation of renminbi was coming sooner or later, yet China's announcement, including reform of
the dollar fixing mechanism, caught many off guard. The move left observers debating whether it was stimulating its
economy or acquiescing to calls for exchange-rate liberalization.
Inside investment: Rights and responsibilities of the renminbi

July 2015
China’s bid to join the currencies in the IMF’s SDR basket is more than a footnote of interest only to economists.
Policymakers should take note.
Interdealer brokers: IDBs bet on RMB boom

July 2015
Renminbi internationalization a big opportunity; commodities counterbalance bank retreat.
Dim sum bond issuance slumps as renminbi globalization struggles to gain traction
June 2015
Recent data suggest that the momentum of the renminbi is slowing, particularly outside Asia.
RMB usage hampered by expertise, liquidity deficit

April 2015
The internationalization of the renminbi could be further turbo-charged if knowledge and
liquidity concerns were addressed, according to a new study on corporates' views of the
Chinese currency.
RMB depreciation expectations shift trading strategies

March 2015
As China gradually loosens its grip on its FX regime, an ostensibly overvalued RMB is expected
to fall back in line with global currencies, presenting a range of opportunities for traders,
ranging from USD/CNH spot positions and the options market, to punts on the CNY-CNH
differential.
Stronger RMB, stronger China

March 2015
China’s currency might look overvalued, but that is only half the story.
RMB: Banks staff up to match rise of Chinese currency

February 2015
The need of banks to raise awareness and staffing levels around the renminbi within their own
organizations looks set to be key as the battle for business heats up.
Rising dollar makes renminbi second-most overvalued currency

February 2015
What goes up must come down, even the renminbi. Having appreciated by more than 30% since 2008 against a
trade-weighted basket, there is growing consensus that 2015 will see further falls in the Chinese currency.
Trade finance: RMB expansion catches up with China GDP

February 2015
Capital controls have constrained the use of the renminbi in global trade, while China’s real economy has surged
ahead. Despite the strict rules around its use, market players are punting on strong RMB growth in 2015,
Euromoney’s Trade Finance survey reveals.
Challenger banks and RMB to shape year ahead

January 2015
The continued internationalization of China’s currency and the emergence of challenger banks is set to define
transaction banking in 2015.
Rise of RMB trading shows little sign of slowing in 2015

December 2014
Despite depreciation risk next year, amid the global currency war, market players say the battle between RMB
offshore financial hubs and trading volumes will go from strength to strength.
Hong Kong-Shanghai Stock Connect enables CNH funding arbitrage

December 2014
The Hong Kong-Shanghai Stock Connect, which was launched amid much fanfare on November 17, has triggered a
jump in CNH-funded arbitrage opportunities. However, rising Stock Connect volumes and easing by the People’s Bank
of China – triggering a convergence between onshore and offshore rates – will remove current funding advantages.
South Korea battling for RMB spoils

October 2014
Backed by its robust trading relationship with China, the east Asian nation is the latest fledgling offshore renminbi
hub. Market participants shed light on South Korea’s renminbi bid as internationalization of the Chinese currency
gathers pace.
IFC plans offshore RMB duration play

October 2014
Buoyed by its Indian success, the World Bank’s private-sector arm the International Finance Corporation (IFC) has set
its sights on further extending the offshore renminbi curve.
RMB: China vs the world

July 2014
The prospect of fierce competition between Chinese and western banks for international RMB business strengthens.
Pulse Survey: Renminbi’s internationalization continues apace

July 2014
When it comes to the difficulties in liquidity management faced by treasurers operating in China, 21.3% say renminbi
cash-pooling is top of the list of issues.
Percentage of cross-border trade settled in RMB
Source: Euromoney Research Group
RMB-sterling trading gets off to a flying start

June 2014
Bankers are already seeing demand for direct renminbi-sterling deals, and anticipate a rise in volumes and market
makers, since the announcement on Thursday it is now possible to directly trade these two currencies in China’s
onshore interbank foreign-exchange market.
Corporates take cautious stance on RMB adoption

June 2014
While renminbi trade flows between mainland China and emerging markets continue to grow, many domestic and
western corporates remain reluctant to trade in the Chinese currency.
Transaction services guide 2014: Redback rising

June 2014
The renminbi’s meteoric rise as a payments and trade currency has brought it closer to becoming mainstream than
ever before. Precisely when this will happen is anyone’s guess. That it will is inevitable.
World payment currencies vs. trade
Global share (extraregional trade only for Europe)

Source: WTO, Swift, Standard Chartered Research
RMB to be a top-five payments and trade currency in three years – ICBC

May 2014
The renminbi has risen dramatically as a world payments and trade-settlement currency in the past three years.
According to the Chinese bank ICBC, it could become a mainstream international currency as soon as 2017.
RMB two-way volatility a key hedging challenge

May 2014
Damian Glendinning, Singapore-based group Treasurer at PC maker Lenovo, sees two-way volatility in the renminbi
(RMB) as a key hedging challenge for the company, and for the market, in the coming period.
Eurozone’s first RMB clearing hub in Frankfurt faces London competition

April 2014
Though Germany lacks sizeable RMB deposits and liquidity, Frankfurt is well-positioned to intermediate trading flows
between China and the eurozone, but it lacks London’s financial depth.
Capital controls in China are broken; Beijing faces a new 'impossible trinity'
April 2014
The sharp jump in cross-border lending to China in recent years means capital controls are de facto broken. As a
result, Beijing faces the “impossible trinity” – an inability to manage exchange rates, monetary policy and allow for
free movement of capital, all at the same time. China faces an renminbi-policy crisis just as much as a potential
credit crisis.
Battle for European RMB trading hub supremacy intensifies

April 2014
Competition among European financial centres to be the main renminbi trading hub is intensifying after the
Bundesbank and Bank of England struck agreements with China to clear and settle payments in the currency.
Decline of yuan-way bets triggers financial stability fears

March 2014
The longstanding one-way bet on USDCNY has been in disarray, but worse might be to come, as China looks to its
FX regime to cope with credit issues, and likely defaults this year, threatening volatility in the structured-product
market.
Jury out on renminbi trading band

February 2014
A shock policy-driven fall in the onshore spot rate has ignited speculation that a widening of the exchange-rate band
is on the cards, while others are unsure the 'two-way' volatility presages a structural shift.
Transaction banks step up to multinationals' RMB liquidity challenge

February 2014
Deutsche Bank has become the latest bank after Citi and HSBC to launch a service enabling the movement of
renminbi-denominated cash between onshore and offshore accounts, crucially boosting companies’ liquidity in the
currency.
Offshore renminbi: Bank of China CEO gives London edge over Luxembourg
February 2014
CEO’s endorsement big boost to the City; renminbi bond issuance globally at record levels.
International renminbi update: Luxembourg 1, London 1

February 2014
London and Luxembourg are at loggerheads to become Europe’s leading offshore renminbi hub – although they
wouldn’t let you know it.
Market is bullish on renminbi internationalization amid China wobbles

January 2014
Concrete advances towards the full tradability of the Chinese currency are at last seemingly being made, helping to
rebalance the country’s growth model but heaping on short-term risks to China’s economic and financial stability.
London the offshore renminbi centre of choice in west, says Bank of China
January 2014
As competition between financial hubs heats up, London’s ambition to become the western destination of choice for
offshore renminbi received a boost from crucial market players this week, following a flurry of successful renminbi-
related developments in the City.
The stock market impact of China’s reforms

January 2014
The country faces many problems in banking, real estate, consumption and demographics that cannot be quickly
solved.
Renminbi offers bright spot amid global trade finance slump

December 2013
The renminbi’s impressive rise this year as a global trade finance currency is a positive development for a critical
market that has been buffeted hard in recent years by limp demand and financial regulation.
London-China ties strengthen as China Construction Bank touts UK business

December 2013
With extended opportunities for UK investors in China through programmes such as the RQFII scheme, China
Construction Bank opened its doors this week to London-based investors, signalling the strength of the Sino-UK
relationship.
Renminbi second only to dollar in trade finance

December 2013
The renminbi has overtaken the euro to become the second most-used currency in trade finance, according to Swift,
the financial messaging service.
Renminbi as world trade finance currency in value
China’s crucial Shanghai trade

December 2013
At its Third Plenum, the Communist Party communicated its commitment to economic change. The country’s first free
trade zone, in Shanghai, will act as the test bed, but without clarity on any number of policies, will international firms rush
to set up shop?
Four challenges facing Shanghai free-trade zone

November 2013
China’s ambitious liberalization experiment in Shanghai, announced at the third plenum, could reshape national policy –
but there are four key challenges that could thwart the project.
FX investors should look east; China could taper before the Fed
November 2013
For all the focus on the Federal Reserve’s plans to start tapering its asset purchases, currency investors should also be
looking at developments in China.
China’s latest swap agreement will facilitate trade

November 2013
Swap agreement reflects growing trade; London has competitive advantage.
US Treasury renminbi undervaluation claim disputed

October 2013
The US government has upped the ante in its criticism of China’s foreign exchange regime, but Lombard Street Research
reckons the renminbi is, in fact, overvalued by 30% on a trade-weighted basis, citing, in part, rising unit labour costs and
disinflationary pressures.
Cash management: A revolution in cash for China

October 2013
Demand for sophisticated cash management services in China is rising as the authorities press for greater business
efficiency at home and Chinese corporates expand their foreign operations. Renminbi liberalization is another driver.
International RMB: Luxembourg 1 Rest of Europe 0

October 2013
London should be wary of the Duchy’s ambitions to become Europe’s RMB hub.
Foreign investors wary of China onshore risks

September 2013
The preferred method for playing Chinese credit markets remains the dim sum bond market, say analysts, as China’s
expansion of access to its onshore market is met with a cool reception by foreign investors.
Emerging market FX growth underperforms broader market

September 2013
Emerging market (EM) currencies are expected to continue to expand their share of the $5.3 trillion-a-day global forex
market despite the turmoil, with China’s RMB leading the charge.
China RMB debate: The renminbi’s road to full internationalization

July 2013
Euromoney’s debate involving leading executives in Asian financial services throws light on the Chinese currency’s
progress to full international status and the likely developments that will hinder and advance the process.
Renminbi overvalued by 30%; China macro risks rise

July 2013
The appreciation of China’s renminbi in the face of deteriorating economic fundamentals and global disinflation
represents a new normal in China’s political economy, but opinion is split about whether the currency is overvalued.
Currencies the best way to hedge against China crash

July 2013
Investors looking to insure against the probability of a hard landing in China should look to the currency market.
China: People’s Bank stays firm to calm fears

July 2013
Funding squeeze reaches peak; PBoC to safeguard stability.
London underlines offshore RMB credentials

June 2013
London’s role in the global RMB market grew substantially last year, with business volumes and the number of renminbi
products provided by London-based banks on the up, according to a new report.
China’s FX carry trade: the next shoe to drop?

June 2013
For FX investors witnessing the volatility in high-yielding currencies, it might seem a strange time to warn about the
potential bursting of a carry trade bubble, but one has managed to slip under the radar.
US falls behind the curve as China pushes forth with internationalization of the RMB
June 2013
Fully convertible RMB: the final frontier

May 2013
Renminbi takes off as trading currency

May 2013
China curbs on speculative inflows pave way for renminbi band widening
May 2013
European capitals scramble to arrange currency trade deals with China

May 2013
China FX liberalization to ease reserve headache; Beijing at point of no return

April 2013
China balances reserves against currency imperative

April 2013
Improved Taiwan-China relations spur investor confidence – Asia Q1 results

April 2013
Chinese banks: too big to compete

March 2013
Redback’s rocky rise: will China bite the monetary bullet?

February 2013
London steals a march on New York with Beijing swap agreement

February 2013
Renminbi a better focus of currency hostilities

February 2013
Nominal GDP targeting – a new method in the Chinese monetary policy madness?
February 2013
Renmimbi internationalization to turbo-charge Taiwan growth

February 2013
China: Cash management revolution under way

February 2013
Special focus: Currency wars

February 2013
Former People’s Bank of China adviser warns on China imbalances

January 2013
The renminbi and cross-border trade: sightings of Bigfoot

January 2013
China rebalancing: winds of change

January 2013
London ramps up its offshore renminbi bid

January 2013
Renminbi: Why not swap?

January 2013
Bond markets: LatAm dim sum whets Asian appetite
January 2013
UK policy hampers London’s RMB drive

December 2012
Lack of single benchmark hurting offshore RMB

November 2012
Sources: Bloomberg, TMA, ANZ
F is forward rate; S is spot rate; d is the number of calendar days for day count adjustment; t is tenor and t=0 is spot.
China Construction Bank's dim sum bond to spark new international bank issuance
November 2012
Renminbi internationalization remains on track despite cyclical drop in payments

November 2012
Start planning now for RMB internationalization

November 2012
Interest rates in China will be fully liberalized in three years – HSBC

November 2012
How to get your money out of China

November 2012
China's government expands the role of the RMB
Source: China Law and Practice
Inside investment: Nudging 1.3 billion Chinese

September 2012
Foreign exchange: Depreciation hampers renminbi

September 2012
Hong Kong: Chan outlines risk and reward for Hong Kong
September 2012
Taiwan agreement opens the gate for Chinese investment

September 2012
Changing dynamics of RMB: Hedge depreciation via forward-forwards

August 2012
Correlation of RMB to China composite
Depreciation fears hamper renminbi internationalization

August 2012
HKMA's Chan outlines risk and potential reward for HK

August 2012
Value of RMB payments increases 17-fold

July 2014
RMB payments grow 17.4 times
Source: Swift
Growing international adoption of RMB payments
Source: Swift
People's Bank of China to keep renminbi flat to the dollar by year-end

July 2012
Source: Capital Economics
You win sum, you lose sum

June 2012
RMB internationalization: From dim sum to a full Chinese banquet

June 2012
RMB internationalization: Who will win China's transaction banking business?

June 2012
London is the natural hub for renminbi

May 2012
Widen RMB trading band to 10% — ex-People's Bank of China advisor

May 2012
Markets hail Asian governments bond plan

May 2012
Hopes rise for Asia regional bond market

May 2012
China: Dim sum bond is offered first on London's menu

May 2012
China cash management debate: Banks in China simplify a complicated world

May 2012
Barclays: China could achieve capital-account liberalization by 2015

April 2012
Middle East: Emirates NBD prints Gulf's first dim sum bond
April 2012
Taipei angles for offshore RMB financial centre status

March 2012
Aussie's days as a China proxy may be numbered, warns HSBC

February 2012
Foreign Exchange: London seeks to be top renminbi trading centre

February 2012
Dim sum bond market shows signs of maturity

February 2012
Taiwan: Cross-strait banking plans to bear fruit

February 2012
Renminbi internationalization to continue in 2012

January 2012
Will UK/HK renminbi deal make a difference?

January 2012
London 'not ready' to be offshore market for China

January 2012
China: Investors lose appetite for dim sum

January 2012
CME adds renminbi to alternative collateral

December 2011
Hong Kong launches renminbi gold trading

November 2011
China cash management debate: The challenges of Chinese cash management

September 2011
CME Group to launch new RMB FX products

September 2011
BNP Paribas focuses on Asia as Renminbi deregulates further

September 2011
Deutsche Bank unveils massive expansion in China

September 2011
Zhou stays firm amid China’s challenges

September 2011
Foreign exchange: Is the Hong Kong peg to the dollar unsustainable?

September 2011
Foreign exchange: Offshore renminbi celebrates first anniversary

August 2011
Will China unhitch from dollar, internationalise renminbi?

July 2011
China: Dim sum fever leaves investors starving for yield

May 2011
Cash management debate: Dynamic Asia makes growing demands on cash management banks
April 2011
China starts onshore options market

March 2011
Asia's financial regulators bolster FX barriers

February 2011
World Bank taps dim sum

January 2011
Dim sum market is a side dish

January 2011
China: Government AMCs to become new conglomerates

November 2010
Renminbi comes to Africa

October 2010
Chinese reform: Renminbi moves to a sweeter spot

October 2010
Everything you always wanted to know about RMB but were afraid to ask
October 2010
A new bond market

October 2010
Chinese reform: Renminbi moves to a sweeter spot

October 2010
FX: Two sides of the renminbi coin

September 2010
Renminbi: Trading places

September 2010
Two steps towards internationalized renminbi

August 2010
Chinese central bank opens up bond market to foreign investment

August 2010
McDonalds serves up first RMB-denominated corporate bond issue
August 2010
Standard Chartered is on the road with Renminbi trade settlement

March 2010
Asia's local-currency boom is a Chinese story

June 2009
HKEx plans derivatives in renminbi and IT upgrade

March 2010
NPLs: China's trillion renminbi problem

January 2009
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8/24/2016 The future of the RMB: special focus /Euromoney magazine

The future of the RMB: special focus

China: special focus

Bric: special focus

Emerging markets: special focus

Asia: China's moment of truth

China’s muddled FX policy sows reform doubts

China A-shares set for MSCI index breakthrough

Emerging markets: Big trouble from brittle China

Beijing seeks to allay fears of China crisis

China: Currency contortions threaten dim sum

Against the tide: China’s bumpy ride

Economists sombre on China monetary trap

China's international payment system gathers steam

RMB: ParFX offers USD/CNH trading

Brics take the road less travelled

Asia’s corporates mature and refine treasury

China: Stock meltdown prompts market intervention

Markets adjust to new RMB normal

China stuns markets with sudden currency devaluation

Inside investment: Rights and responsibilities of the renminbi

Interdealer brokers: IDBs bet on RMB boom

RMB usage hampered by expertise, liquidity deficit

RMB depreciation expectations shift trading strategies

Stronger RMB, stronger China

RMB: Banks staff up to match rise of Chinese currency

Rising dollar makes renminbi second-most overvalued currency

Trade finance: RMB expansion catches up with China GDP

Challenger banks and RMB to shape year ahead

Rise of RMB trading shows little sign of slowing in 2015

Hong Kong-Shanghai Stock Connect enables CNH funding arbitrage

South Korea battling for RMB spoils

IFC plans offshore RMB duration play

RMB: China vs the world

Pulse Survey: Renminbi’s internationalization continues apace

Percentage of cross-border trade settled in RMB

RMB-sterling trading gets off to a flying start

Corporates take cautious stance on RMB adoption

Transaction services guide 2014: Redback rising

RMB to be a top-five payments and trade currency in three years – ICBC

RMB two-way volatility a key hedging challenge

Eurozone’s first RMB clearing hub in Frankfurt faces London competition

Battle for European RMB trading hub supremacy intensifies

Decline of yuan-way bets triggers financial stability fears

Jury out on renminbi trading band

Transaction banks step up to multinationals' RMB liquidity challenge

International renminbi update: Luxembourg 1, London 1

Market is bullish on renminbi internationalization amid China wobbles

The stock market impact of China’s reforms

Renminbi offers bright spot amid global trade finance slump

London-China ties strengthen as China Construction Bank touts UK business

Renminbi second only to dollar in trade finance

Renminbi as world trade finance currency in value

China’s crucial Shanghai trade

Four challenges facing Shanghai free-trade zone

China’s latest swap agreement will facilitate trade

US Treasury renminbi undervaluation claim disputed

Cash management: A revolution in cash for China

International RMB: Luxembourg 1 Rest of Europe 0

Foreign investors wary of China onshore risks

Emerging market FX growth underperforms broader market

China RMB debate: The renminbi’s road to full internationalization

Renminbi overvalued by 30%; China macro risks rise