Foreign Exchange

A lack of consensus on whether recent under-performance of Asian currencies will impact China’s willingness to let its own currency weaken is leading to disparate views on near-term valuations.

Previous changes of policy direction have left analysts undecided on whether to attribute recent sharp corrections to the renminbi reference rate to accident or design – or even a combination of the two.

While the dollar’s international supremacy is unchallenged for now, the wider landscape is shifting. Companies are raising more funding in renminbi and the currency’s use in international payments and settlements is growing.

Asiamoney ranks the top five counterparties and top three Asian counterparties in 11 different Asian jurisdictions as part of our 41st annual survey of liquidity consumption in the global FX markets.

The winners of this year’s RMB survey are already benefiting from a new wave of liberalization across commercial and investment banking activity that will allow the currency to win wallets around the world.

Instead of ignoring its colonial past, Macau is using it as a unique selling point for its renminbi clearing services by targeting Portuguese-speaking markets. But that business hasn’t arrived yet, and it will always struggle to overcome the challenge of the commodity dollar.

The growth of renminbi trade has stalled, but it has forced a turning point to how corporates use the Chinese currency.