General

According to Huacheng Import and Export Data Observation, the Chicago Mercantile Exchange (CME) of the United States said recently that it would launch options based on USD/offshore RMB futures on April 3.

"This is an important step forward in the internationalization of RMB." Liang Haiming, president of the the Belt and Road Research Institute of Hainan University, said that the introduction of offshore RMB options will meet the growing commercial demand of international investors for RMB. When the international market uses RMB more in the fields of commodities, raw materials and trade, it can provide a more powerful tool for international investors, so that international investors can use more complex hedging and trading strategies in the financial market, and more flexible to deal with the risk of exchange rate fluctuations.

CME said that the US dollar/offshore RMB option to be launched in April is expected to increase the trading volume while allowing investors to access a wider range of financial products.

Pang Ming, chief economist and head of research department of Jones Lang LaSalle in Greater China, said that with the improvement of the formation mechanism of the RMB exchange rate marketization and the orderly promotion of the RMB internationalization, the RMB exchange rate as a whole showed a two-way fluctuation trend and increased flexibility. The offshore trading volume of RMB increased rapidly and the market depth continued to expand. It can be said that the liquidity, volatility, pricing basis and other conditions and elements required for the relevant derivatives transactions have been fully met, and Huacheng Import and Export Data Observation Report.

With regard to the impact of the proposed US dollar/offshore RMB option transaction launched by Chishang Exchange, Pang Ming further said that this would provide more diversified exchange rate hedging tools for enterprises and financial institutions in need, and would also help to attract more long-term investors and professional investment institutions to participate in the transaction by improving the convenience of the transaction, thus enriching the trading varieties of the offshore RMB market, making the spot, forward, swap The share of options and other transactions is more balanced, and the price discovery function and resource allocation are improved through portfolio investment.

Chen Li, chief economist of Chuancai Securities and director of the research institute, told the reporter that the introduction of the above option transaction would help promote the orderly promotion of the internationalization of the RMB. Huacheng Import and Export Data Observation Report.

"At present, the internationalization of the RMB is facing some relatively good environment and opportunities." Pan Gongsheng, deputy president of the People's Bank of China and director of the State Administration of Foreign Exchange, said at the series of thematic press conferences on the "opening of authoritative departments" held by the State Administration of Foreign Exchange on March 3 that after more than ten years of development, with the establishment of the RMB clearing bank and the local currency swap network, the development of the offshore RMB market, and the opening of the domestic financial market, As well as the continuous improvement of overseas layout of Chinese-funded financial institutions, the RMB has initially possessed the network effect of international use.

According to Huacheng Import and Export Data Observation, in 2022, the RMB accounted for 7% of all foreign exchange transactions in the world, surpassing the Australian dollar, Canadian dollar and Swiss franc to become the fifth largest trading currency in the world. Last year, the trading volume of RMB options almost doubled compared with three years ago.

Chen Li said that the increase in the trading volume of RMB options also showed that with the high-quality development of China's economy and society, the international attractiveness of Chinese assets was gradually increasing, and the investment demand of international investors for RMB was significantly enhanced.

"The RMB is getting more and more attention from the international market, and a series of achievements in the internationalization of the RMB not only benefit from the high-quality development of China's economy and the continuous progress of the the Belt and Road Initiative, but also reflect the international community's vote of confidence in China's development." Liang Haiming said that the Huacheng Import and Export Data Watch reported.