Northeast Asia

The China Foreign Exchange Trade System (CFETS) published the details of an exchange rate index for the renminbi for the first time on December 11. The index is based on a basket of 13 currencies, with the dollar, euro and yen taking the lion's share.

The IMF changed the weighting formula for its Special Drawing Rights basket ahead of the inclusion of the renminbi last month. However, using the old SDR formula to determine Chinese currency’s weight would have been preferable, according to a former IMF official.

IMF staff have issued a detailed report containing the analysis and recommendations made to the Fund's executive board ahead of its SDR decision. The report offers a useful analysis into the RMB's standing globally, including its importance as a reserve currency and the level of trading it commands in global foreign exchange markets.

The IMF has approved the renminbi as the fifth currency in its Special Drawing Rights (SDR) basket of currencies with a weighting of 10.92%. The new SDR will come into effect on October 1, 2016.

A symbolic rather than market changing move is the general view of the renminbi’s inclusion into IMF’s Special Drawing Rights (SDR) basket. However, many analysts believe impact could be profound if China is willing to take the real test reforming its domestic financial markets.

eHi Car Services finally made its debut in the international bond market, raising $200m from a three year bullet on Tuesday. After its first attempt at a deal failed in August, it decided to pay up this time to ensure success.

The Dubai Gold and Commodities Exchange (DGCX) is set to launch trading of offshore RMB (CNH) futures contracts on December 18. The exchange is looking to leverage the RMB’s new-found status as an SDR currency, it told GlobalRMB.

Asset manager AllianceBernstein is offering a drastically different view on the knock on effects from the renminbi’s inclusion in the IMF’s Special Drawing Rights (SDR) basket. While the consensus is that it will have little impact on the desirability of RMB assets, the manager is forecasting a huge spike in demand.

Markets have been readying for the renminbi’s inclusion in the SDR basket for months, but now that we have the detail what do the experts think? GlobalRMB wraps up the most noteworthy of the market reaction, on- and offshore.

The renminbi may have got the go head to join the list of currencies backing IMF’s Special Drawing Rights basket, but the change will not actually go live until October 16. Although the IMF has said the delay is merely due to operational reason, questions are being asked about whether other factors are at play.

In a widely anticipated move, the IMF executive board has approved the renminbi as the fifth currency in the Special Drawing Rights (SDR) basket of currencies with a weighting of 10.92%, the IMF said in a November 30 statement. The new SDR will go into effect as of October 1, 2016.

Offshore renminbi funding costs have increased 100bp-150bp in recent weeks after China’s central bank shut down cross-border lending. The move was designed to reduce volatility in offshore renminbi (CNH) ahead of the IMF decision on its Special Drawing Rights basket, several offshore traders have said to GlobalRMB.