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Foreign Exchange

HKEx announces plans for RMB futures

The drive towards the internationalization of the renminbi has continued, with Hong Kong Exchanges and Clearing Limited (HKEx) announcing plans to launch offshore renminbi futures.

The planned USDCNH futures contract is due to start trading in the third quarter, subject to regulatory approval and market readiness. The announcement follows a series of key developments aimed at the eventual convertibility of the renminbi in recent weeks, with the People’s Bank of China widening the currency’s trading band against the dollar, and London making a push to become the western trading hub for offshore renminbi.

HKEx’s USDCNH futures contract requires delivery of USD by the seller and payment of the final settlement value in renminbi by the buyer at maturity.

Under HKEx’s plan, the contract will be quoted in renminbi per USD and margined in renminbi, with the trading and settlement fees charged in renminbi.

HKEx has scheduled a market readiness test for the end of June and has invited applications from potential market makers for the contracts.

“This initiative is part of our strategy to expand beyond equities and equity-related derivatives, offer a wide range of renminbi-traded products and take advantage of the opportunities we see in fixed income, currencies and commodities,” says HKEx chief executive Charles Li.

“It also reflects our desire to support Hong Kong’s further development as an offshore renminbi centre.”

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