Renminbi liberalisation gathers pace
Necessary infrastructure is now in place for greater liberalisation of the renminbi but the way ahead is not without technical and practical difficulties, with much dependance on the actions of international players. May 28, 2012 | Levina LimImportant milestones have been achieved in the path towards greater liberalisation of the renminbi. So, what has changed, and can the final goal of renminbi liberalisation be achieved? Figure 1. Growth of Rmb-denominated issuance and trade settlement The path seems set for China’s greater liberalisation of the renminbi, with Premier Wen Jiabao’s initial announcement in March 2012 that three years henceforth, the world could look forward to full convertibility of the renminbi, allowing it to float freely on world markets. Just a month later, HSBC raised Rmb2 billion ($317 million) worth of 3% “dim sum” three-year bonds in Hong Kong, the very first of its kind. Most recently, Standard Chartered Bank announced that it is now the largest issuer of renminbi denominated Euro Commercial Paper outside of London – the result of achieving its Rmb1 billion (US$158 million) target. China’s ICBC too has completed an Rmb100 million Certificate of Deposit (CD) issue, marking a pioneering renminbi CD transaction from a Chinese bank in London. Indeed, big numbers are involved. According to Peter Zhang, deputy director general of the China Banking Regulatory Commission and author of “The Chinese Yuan” at the Asian Banker Summit 2012, the Chinese Yuan ) cross-border trade settlement in renminbi surpassed Rmb2.08 trillion in 2001, which is almost three times larger in volume compared to Rmb500 billion in 2010. This accounts for a 6.33% increase of China’s total cross-border trade settlement denominated in the renminbi across two years. HSBC’s Rmb-denominated bond issuance in Hong Kong amounted to Rmb107.9 billion in 2011, representing a significant jump from Rmb36 billion issued in 2010. Despite a modest decline in renminbi deposits in Hong Kong in the fourth quarter of 2011 due to the CNY depreciation in September, the increase in r... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: China, Rmb, Trade Finance, Transaction BankingChina,Rmb,Trade Finance,Transaction Banking, China,Rmb,Trade Finance,Transaction Banking, Keywords:HKMA, HSBC, Peter Zhang, Lu Shu Pui, Patrick De Courcy, Thierry De Longuemar, China, Hong Kong, London, Offshore Renminbi Centre, Foreign Exchange Market, Bond Market HKMA, HSBC, Peter Zhang, Lu Shu Pui, Patrick De Courcy, Thierry de Longuemar, China, Hong Kong, London, Offshore Renminbi Centre, Foreign Exchange Market, Bond Market
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