China

Supranational bodies are unlikely to tap the CNH discounted notes market in the short term as the genuine need for renminbi funding by these entities remain limited, say experts.

In this round up of recent offshore renminbi news, China and the UK discuss a swap line, regulators prepare to expand dims sum and RQFII quotas and clearing service begins offering USD/CNH futures.

The renminbi continues its ascension towards becoming a major international payments currency, surging 24% and overtaking the Russian rouble, says Swift.

Top 3 Offshore RMB DCM Transactions - 2013 YTD

Abundant liquidity has driven offshore rates 50 basis points (bp) lower than their Mainland counterpart spurring CD and dims sum issuance but this gap is expect to close as new cross-border initiatives absorb liquidity.

China’s stock market regulator will expand the renminbi qualified foreign institutional investor programme to include more participants with a renewed focus on equities.

Far East Consortium raised Rmb1bn ($158.9m) on Monday evening, after its bookrunners were able to double the size of a dim sum bond from what they had initially planned. The company turned its back on a dollar bond last year after struggling to get enough demand, but that was clearly not a problem in the offshore renminbi market.

China central bank governor Zhou Xiaochuan is back in vogue to control the PBoC. Despite him reaching retirement age, the Party could do far worse than keep him – at least until a better alternative arises.

China’s central bank will extend a foreign currency swap agreement to the Bank of England, marking a new high for China that lends a level of credibility to the renminbi internationalisation process.