Singapore hits critical mass in offshore renminbi futures
Volatility in China and increased onshore access means a greater need for hedging; Singapore also building offshore rupee traction.
One number stood out when Singapore Exchange (SGX) issued its full-year trading numbers for 2018 last week.
Dollar/CNH futures trading – referring to offshore renminbi – hit a total of $534 billion, a 181% year-on-year increase over 2017.
The figure for December alone was $65.4 billion, a record. The contract is now shifting $2.17 billion a day in average daily volume, and crossed $1 billion on 238 days last year, compared with 54 days in the previous four years.
There is a sense of offshore renminbi trading having suddenly hit critical mass in Singapore. It has taken a while: the SGX began a complex of FX pairs five years ago, embracing the Indian rupee as well as renminbi, and today has 19 currency pairs listed on the exchange, but it is USD/CNH that dominates.