Whether you are considering doing business in and out of China or have been present in the country for a significant amount of time, the pace of China’s efforts of liberalise its currency, the renminbi (RMB), cannot be ignored. The rate of change continues to accelerate which is opening up new opportunities across trade, cross-border financing, foreign exchange and investment.
For the first time in more than a decade, the RMB is showing two-way volatility as a result of ongoing changes being made by the People’s Bank of China (PBoC) to the daily price setting process for the RMB. As the RMB moves towards a more “market-driven” exchange rate, risk management and FX hedging are becoming increasingly important considerations to manage the volatility arising from market forces. As time passes, the RMB may also increasingly become a preferred currency for local Chinese corporates to better manage their currency risk which will be an important consideration for China’s foreign trading partners. With one of the largest capital markets in the world, opportunities also abound for investors to secure access to Chinese bonds and equities as China rapidly removes many restrictions around inbound investing.
WHAT BUSINESSES THINK ABOUT THE RMB
The RMB experienced an unprecedented rise in usage among businesses between 2012 and 2015, yet 2016 saw interest in the RMB fall signicantly. Have businesses lost condence in the RMB? ANZ surveyed more than 500 nancial professionals to find out.