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| size of deposit base of the offshore deliverable renminbi currency market |
Just over a year ago, the Hong Kong Monetary Authority granted permission for quantities of Chinese renminbi to be transferred between accounts in Hong Kong for any purpose for the first time. This marked the birth of the offshore deliverable renminbi (CNH) currency market. The market’s growth has exceeded most people’s expectations. The CNH deposit base has reached Rmb549 billion ($85 billion) and the offshore renminbi currency market has gone from being practically non-existent to a $3 billion-a-day trade in spot and forwards. The offshore renminbi is now on a par with the previously dominant renminbi non-deliverable forward market (NDF), and has quickly formed one of Asia’s top offshore FX markets. In May CNH trading volumes in Asia surpassed the average daily trading volumes in the NDF market, and HSBC, one of the largest CNH market-makers, expects that the new currency will soon surpass NDF trading in Europe as well. The CNH currency options market has quickly developed too: average daily volumes are about $200 million to $300 million, HSBC adds.