Offshore #Renminbi pool grows deeper in #HongKong

Offshore Renminbi is gaining momentum and becomes increasingly attractive for investors on the forex market. World’s leading forex trading platform, FXall, embraced forwards and swaps this past July, allowing its clients to trade China CNH spot.

Correspondingly, investors’ appetite for Dim Sum Bonds is rising as well. In the last 4 weeks, Yuan-denominated debt sold in Hong Kong rose, advancing 1.25 percent to generate the longest winning streak since May.

As if the offshore market in Hong Kong is not growing fast enough, high-profile Chinese government officials gave an extra push to this already-explosive growth by re-emphasizing that Beijing is fully supportive of Hong Kong’s increasingly important status as an international financial center. Especially now that the CNH pool has reached a significant scale, with the outstanding Renminbi deposits in Hong Kong totaling around RMB622.2 billion by the end of September 2011, more channels will be opened to diversify CNH investment instruments.

One such exciting new channel is the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme. Although the scheme is still under construction,  Mr Li Keqiang, Vice-Premier of the State Council, already announced in August that the central government will allow investments in the Mainland equity market through RQFII scheme and support Hong Kong’s insurance companies to enter the mainland market by means of setting up offices or taking up stakes.

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