China

Hong Kong’s de facto central bank expanded its investigation into the potential Hibor rate-rigging days before CNH Hibor’s launch. The overt call for transparency is designed to keep banks on their toes.

The recent spike in the country’s interbank rates is a sign of volatility to come, as regulators tighten monetary policy and banks hold cash close, says the UK bank.

In this roundup of offshore renminbi news, Hong Kong clears more renminbi settlements than Hong Kong dollars in May, Blackrock issue the first CNH bond exchange-traded fund, and the China Securities Regulatory Commission (CSRC) gives five more qualified foreign institutional investor quotas.

ICICI Bank tightened guidance on its Rmb650m ($106m) three year offshore renminbi deal on June 18, allowing the lender to lock in its lowest coupon for a dim sum bond.

ICICI Bank tightened guidance on their Rmb650m ($106m) three year offshore renminbi deal on June 18, allowing the lender to lock in its lowest coupon ever achieved for a dim sum bond.

ICICI Bank launched an offshore renminbi deal on June 18 hoping to net some of the strong demand that Caterpillar Financial Services Corporation received a day earlier for its dim sum.

Caterpillar Financial Services Corp priced the year’s largest offshore renminbi bond by a multinational corporation on June 17 raising Rmb1.8bn ($293.6m). The company took no chances, pricing the deal at premium to encourage investors still jittery from the recent volatility in the international financial markets.

Eroding investor confidence in the renminbi ahead of a correction has driven up foreign exchange hedging rates and eliminated opportunities for Chinese entities seeking arbitrage opportunities.

Caterpillar Financial Services Corporation priced the year’s largest offshore renminbi bond by a multinational corporation on June 17 raising Rmb1.8bn ($293.6m). The company took no chances, pricing the deal at premium to encourage investors still jittery from the recent volatility in the international financial markets.

The Federal Reserve’s plan to increase interest rates after 2014 could potentially decrease Hong Kong competitiveness as an alternative funding hub to China, says the bank.

Despite reporting growth in renminbi transaction flows in 2012, London also experienced a drop in renminbi deposits and diminished activity in areas key to the currency’s internationalisation.