Yuan money markets are expanding in Hong Kong as more banks quote interbank interest rates for the currency, helping widen its use for trade and investment beyond China's borders.
JPMorgan Chase & Co., ICBC (Asia) Ltd., Bank of Communications (Hong Kong) Ltd., Bank of East Asia Ltd. and Bank of Tokyo-Mitsubishi UFJ Ltd. started providing interbank rates for yuan in Hong Kong today, according to Jack Cheung, chief executive officer of the city's Treasury Markets Association. That brings to eight the number of lenders quoting prices. Bank of Tokyo-Mitsubishi and Citigroup Inc. completed the first yuan interest-rate swap involving the Hong Kong interbank rate.
"It's a breakthrough," said Dariusz Kowalczyk, a Hong Kong-based strategist at Credit Agricole CIB. "In order for the market to fully develop, you do need a swap curve. This will allow more financial instruments like hedging for Dim Sum bonds and benchmarks for loans to develop in the offshore yuan market."
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
