Renminbi’s long march to internationalisation

SINGAPORE (June 10): China is making good progress in its efforts to internationalise its currency and create avenues for investors to speculate on its foreign exchange rate but the renminbi (RMB) could face its toughest test yet with worries over a US Fed rate hike and Brexit looming over the horizon.

In December, the People’s Bank of China (PBOC) rolled out CFETS RMB Index to facilitate interbank trading. In May, Hong Kong Exchanges and Clearing (HKEx) and Thomson Reuters signed a deal for the creation of a new offshore renminbi index to help drive offshore trading of the RMB. Last month, China also successfully sold a RMB-denominated sovereign bond in London, the first such sale outside the Mainland and Hong Kong.

Earlier this month, the HKEx said it would be launching four new offshore deliverable renminbi futures. HKEx had launched a USDCNH futures contract in Sept 2012 and that is now the most liquid listed renminbi-denominated futures contract in the world.

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