RMB round-up: PBoC governor urges looser capital control, HK leader backs cross-border RMB business, UK RMB deposits up in Q2

The governor of the People’s Bank of China calls for capital controls to be scaled back, Hong Kong’s chief executive says the city will expand its RMB business by increasing the level of cross-border fund flows, and RMB deposits in the UK grow in the second quarter.

  • By Paolo Danese
  • 13 Oct 2017
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Regulators:


  • China should continue to open up its economy to foreign investment, reform the renminbi’s exchange rate mechanism and cut back on capital controls, Zhou Xiaochuan, the PBoC’s governor, told Chinese media on October 9.
    In particular, Zhou named strict capital controls as a major obstacle to the opening up of China’s economy.
    “There is not a single country in the world which could achieve an open economy with severe capital controls,” he said. “And not one country has achieved positive interaction between its domestic and foreign markets while the exchange rate is seriously unbalanced.”
    Zhou, who is expected to retire in 2018, made the remarks shortly before the National Congress of the Communist Party, which will start on October 18.


Hubs:


  • Hong Kong will cement its status as an offshore renminbi business hub by participating in the Belt and Road Initiative, said Carrie Lam, chief executive of Hong Kong, on October 11.
    Lam, who took office in July, also promised to increase the level of cross-border fund flows between Hong Kong and Mainland China.
    “We will explore the possibility of including in the two‑way mutual access mechanism a wider range of investment products, such as exchange traded funds, and extending the Mainland‑Hong Kong Bond Connect to cover southbound trading,” said Lam.
  • Renminbi deposits in the UK reached £9.67bn in the second quarter, up 7% quarter-on-quarter, according to figures published by Bank of England. Turnover for RMB FX spot fell by 21% to £16.7bn, whereas RMB FX forwards, swaps and options turnover rose by 5%, 8% and 18%, to £11.4bn, £12.5bn and £11.1bn, respectively.


FX:


  • The volume of China’s FX reserves stood at $3.1085tr at the end of September, up 0.5% month-on-month, according to the State Administration of Foreign Exchange. This marked the eighth consecutive month of grow for China’s FX reserves, the regulator noted in an October 9 statement.
  • The PBoC’s renminbi fix against the dollar was set at 6.5866 this morning, 58bp weaker from Thursday. The NEX CNH benchmark came in at 6.5859 at 4.31pm on Thursday, weaker than 6.5781 on Wednesday.
    The dollar index closed at 93.057 on Thursday, up 0.05% from Wednesday, according to Bloomberg. The Thomson Reuters CNY reference index closed at 96.01 on Thursday, down 0.3% from its previous close.



  • By Paolo Danese
  • 13 Oct 2017

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 Bank of China (BOC) 28.15
2 CITIC Securities 21.52
3 China CITIC Bank Corp 9.93
4 China Merchants Bank Co 9.38
5 Industrial and Commercial Bank of China (ICBC) 7.73

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 13-Oct-17 Global Logistic Properties Singapore 1,000
2 19-Sep-17 Skyworth Digital Holdings China 2,000
3 14-Sep-17 Bank of China (Hong Kong) (BOCHK) China 9,000
4 05-Sep-17 Joy City China 1,000
5 01-Sep-17 Rusal Russian Federation 500

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 37.58
2 JP Morgan 18.57
3 HSBC 16.29
4 Credit Agricole 12.53
5 Barclays 3.76

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 19-Oct-17 Commonwealth Bank of Australia (CBA) Australia 1,500
2 11-Oct-17 BMW Finance NV The Netherlands 1,000
3 11-Oct-17 BOC Aviation Singapore 1,000
4 28-Sep-17 National Bank of Canada Canada 600
5 22-Sep-17 Royal Bank of Canada Canada 900