FX:
China Foreign Exchange Trade System (CFETS) began providing spot, forward and swap trading between the onshore renminbi (CNY) and the Thai baht in the interbank market on Monday, according to a February 2 announcement by CFETS.
In an effort to promote the Belt and Road Initiative, CFETS is exempting commission fees for all CNYTHB trading until the end of July 2020. The addition of the currency pair to the interbank market will further promote bilateral trade and investment, and the usage of RMB in cross-border settlement, said CFETS.
CFETS has named 13 banks as market makers for CNYTHB transactions, including the onshore branches of Bangkok Bank, HSBC, Kasikornbank, OCBC, Standard Chartered and UOB.
The move came after CFETS said on January 5 that it will open up the CNY market for overseas banks based in Cambodia, Kazakhstan, Mongolia and Thailand.
The trade-weighted index by CFETS closed at 95.82 on January 31, up 1.02% in the month, with the BIS basket and special drawing rights basket at 96.75 and 96.94, up 0.85% and 0.99%, respectively.
Belt and Road:
Hong Kong remains crucial to China and its attempts to internationalise the RMB, Zhang Dejiang, the chairman of the Standing Committee of the National People’s Congress, said at a forum in Beijing on February 2.
“Hong Kong remains the greatest source of foreign investment for China, and it is the first choice for China in piloting policies such as RMB internationalisation,” he said.
Speaking at the same forum, Norman Chan, chief executive of the Hong Kong Monetary Authority, said RMB internationalisation is inseparable from the Belt and Road Initiative, arguing that Hong Kong could serve as the one-stop-shop for Chinese companies as they invest abroad, providing services such as settlement, bond issuance and IPOs, according to a February 3 local media report.
Derivatives:
The China Securities Regulatory Commission is preparing to open up iron ore futures trading to foreign investors on the Dalian Commodity Exchange, the regulator said in a February 2 announcement.
Hubs:
China Construction Bank has opened an overseas branch in Auckland, New Zealand, the bank said in a February statement.
The new branch will provide funding for local infrastructure projects, financing for Chinese companies in New Zealand, and RMB settlement, trade finance and financial markets services, said CCB.
CCB also has a wholly-owned subsidiary in New Zealand, China Construction Bank (New Zealand), which was launched in July 2014.
The Singapore Exchange’s USDCNH futures hit a record in trading volume in January at 297,011 contracts, worth $29bn, the bourse said in a February 2 announcement. The growth marked a 175% year-on-year increase for the offshore renminbi product.
Daily open interest for the contract also reached a new high on January 26, hitting 31,278 contracts or $3.21bn.
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