RMB round-up: Safe clarifies cross-border FX rules, RQFII quotas updated, Hungary adds RMB capabilities

In this round-up, People’s Bank of China defends its use of foreign exchange (FX) reserves to preserve stability in the currency markets, two new entities are added to the RMB qualified institutional investors (RQFII) programme, and Hungary’s central bank signs an agreement to expand access to the Chinese capital markets. Plus, a recap of our coverage this week.

  • By Paolo Danese
  • 27 Jan 2017
Email a colleague
Request a PDF

Our coverage:


  • The markets were largely in a lull ahead of the Chinese Lunar New Year holiday that starts today. The fixing on Thursday was 6.8588, down 8bp on a day earlier. The onshore RMB spot market closed at 6.8807, down 0.1% from the end of last week. In the offshore RMB markets, the gap was narrowing with the spot rate closing at 6.8484, flat during the session.
    The Thomson Reuters CNY reference index (RXY) closed at 95.11 on January 26, down 0.2% in the week, while the broad dollar index was flat in the week, trading at 100.58 as of 11am on Friday, according to Wind data.
  • The State Administration of Foreign Exchange (Safe) has released a series of guidelines that is aimed at making its FX and cross-border repatriation rules ‘more complete.’ Among the many changes, Safe has now made it clear that offshore fundraising backed by onshore guarantees can be repatriated back into the country for domestic use. In addition, the FX regulator has made it easier for multinational corporations to deploy their cash for usage within China. Previously, onshore banks were restricted in their ability to deploy deposits from cross-border FX transactions. The limit was set at 50% of the average daily remaining deposits over the past six months and has now been increased to 100%.

  • The deputy governor of the People’s Bank of China (PBoC) Yi Gang said in an interview with a local Chinese paper that it makes no sense for China to be branded a currency manipulator. Yi pointed out that China has only met one of three requirements laid out by the US in order for a country to be labelled as such. As a result, there is no basis for new US president Donald Trump’s comments that China is a currency manipulating country. In addition, Yi said that the PBoC’s efforts to keep the renminbi stable by using $1tr FX reserves in the past two years is ‘more good than bad.’ The deputy governor explained that the whole purpose of having FX reserves is for them to be used. And results have proved that the tactic is working with the renminbi kept relatively stable in spite of a surging US dollar.
  • CFETS updated the list of market participants in the onshore FX market, noting that there were close to 400 foreign or foreign-funded institutions. This included 98 foreign-funded banks, 102 foreign banks, 46 foreign central banks, 12 offshore RMB clearing banks, and seven international finance organisations.


  • Safe published the updated list of RQFII entities for the month of January. Fidelity Investments (Singapore) received its first quota of Rmb460m ($67m), while UK's Goldman Sachs Asset Management International received Rmb694m. Meanwhile, the China Securities Regulatory Commission granted one RQFII licence in December 2016, according to a January 17 update. The latest licence went to Pioneer Asset Management in Luxembourg. There is now a total of 179 RQFII institutions with quotas worth Rmb529.6bn, or 35% of the available country quotas. Total 2016 quotas were Rmb85bn, 41% lower than 2015.
  • In an annual report on the A-shares market, China Exchange Services Company (CESC), a joint venture between Hong Kong Exchange and Shanghai Stock Exchange, said that a number of RQFII entities have introduced offshore exchange-traded funds (ETFs) investing in physical A-shares in Hong Kong, the US and Europe. However, the report noted that only two funds, CSOP FTSE China A50 ETF – with assets under management (AUM) of Rmb17.2bn – and ChinaAMC CSI 300 Index ETF – AUM of Rmb9.5bn ­– both issued and listed in Hong Kong, have asset size approaching Rmb10bn. The total asset size of physical A-shares ETFs is around Rmb28bn, CES said.
  • The Shanghai Stock Connect saw A-shares buying in the month of January totalling Rmb28.9bn, while selling was Rmb30.9bn. On the Shenzhen Connect buy trades totalled Rmb18.4bn and sell trades were Rmb6.8bn, showing that foreign investors' interest was still stronger for Shenzhen-listed stocks.


  • The Bank of China Cross-border RMB Index managed to end a four-month decline with a marginal increase for the month of November. The CRI increased by three points to 251 thanks to a 24% monthly increase in RMB settlement under the current account and direct investment account. However, the year-on-year performance of the CRI was poor with the index falling by 25bp.
  • CLS, a foreign exchange market infrastructure provider, signed a memorandum of understanding (MoU) with the National Institution for Finance and Development (NIFD) on January 23, CLS said in a statement. The agreement targets supporting the development of the Chinese economy and renminbi internationalisation.
    “China’s financial development would be enhanced by integration with global financial markets and infrastructure to support its important and growing role in the world”, said Rachael Hoey, head of Asia at CLS Group.

Hubs news:

  • Hungary strengthened its renminbi credentials this week with its central bank signing two MoUs with Bank of China. The first was a master agreement on Interbank Market Agency Business, which will see the Hungarian central bank gain access to China’s interbank bond market (CIBM) via the help of Bank of China. The second agreement was an MoU on Renminbi Clearing Account Service. Under the terms of the agreement, Bank of China will act as an advisory role to help the central bank assess how it could carry out renminbi settlements in a more efficient manner and also to strengthen the role of Budapest as the central and eastern European clearing hub.

And, finally, GlobalRMB wishes you a prosperous Year of the Rooster!


  • By Paolo Danese
  • 27 Jan 2017

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 Bank of China (BOC) 28.62
2 CITIC Securities 21.06
3 China CITIC Bank Corp 9.72
4 China Merchants Bank Co 9.18
5 Industrial and Commercial Bank of China (ICBC) 7.56

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 22-Nov-17 Province of British Columbia Canada 1,000
2 15-Nov-17 Daimler Germany 4,000
3 13-Oct-17 Global Logistic Properties Singapore 1,000
4 19-Sep-17 Skyworth Digital Holdings China 2,000
5 14-Sep-17 Bank of China (Hong Kong) (BOCHK) China 9,000

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 31.63
2 BNP Paribas 16.57
3 HSBC 14.01
4 JP Morgan 13.39
5 Credit Agricole 11.30

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 15-Nov-17 Bank of China Paris Branch (BOC Paris) China 1,000
2 02-Nov-17 Hitachi Capital (UK) United Kingdom 500
3 27-Oct-17 Korea Development Bank (KDB) South Korea 1,400
4 19-Oct-17 Commonwealth Bank of Australia (CBA) Australia 1,500
5 11-Oct-17 BMW Finance NV The Netherlands 1,000