China

In this week’s roundup of offshore renminbi news, the National Development and Reform Commission awards dim sum quotas, Singapore strengthens its role as an offshore hub and Taiwanese deposits rise.

The Chinese government will take more steps to encourage the development of the dim sum bond market but a lack of transparency could delay progress, says Moody’s.

Two years after Toyota Motor Finance (China) submitted applications to issue a renminbi-denominated bond onshore, the Japanese firm has finally achieved its sale.

Chinese state-owned enterprises have enjoyed solid support in the international bond markets because of the perception that their strategic importance will make a default highly unlikely. That level of support could change in the coming years, making it crucial for investors to start digging deeper into fundamentals rather than relying simply on uplifted credit ratings.

Offshore bonds issued by Chinese state-owned enterprises could increasingly trade closer to their standalone credit ratings as policymakers move closer to a market-driven approach, says Fidelity.

The development regulator has finally issued its long-awaited dim sum quotas for state-owned enterprises. But its system lacks efficiency at a time when Chinese SOEs should lead the market.

Bank of China has launched into syndication the first offshore renminbi loan to reference the unified CNH Hibor — which came into force in June — for a subsidiary of China Longyuan Power Corp. But in order to protect banks from fluctuations in the new interbank rate, the deal’s margin comes with a floor, writes Lorraine Cushnie.

Bank of China has launched into syndication the first offshore renminbi loan to reference the unified CNH Hibor — which came into force in June — for a subsidiary of China Longyuan Power Corp. But in order to protect banks from fluctuations in the new interbank rate, the deal’s margin comes with a floor.

China will liberalise rules on renminbi-denominated bond issuance, investment, interest rates and cross-border transactions by 2020 to bolster the CNY’s case to be a global reserve currency, says Standard Chartered.

The introduction of automated two-way sweeping in the Shanghai free trade zone could see onshore/offshore renminbi lending rates converge by 100 basis points.

In this week’s round up of offshore renminbi news, London bolsters its role as an offshore renminbi hub, the European Central Bank, Iceland and Indonesia get swap lines, and Thailand seeks a RMB clearing bank.