RMB volatility slows corporate hedging activity

Demand for structured forwards down by 80% as corporates wait for currency to stabilise, dealers say

Chinese currency

The depreciation in the RMB against the USD over the past two months engineered by the People's Bank of China (PBoC) has dampened demand from corporate clients to hedge RMB exposures, say dealers. Following the band widening by the PBoC on March 17 to allow the onshore spot rate to appreciate or depreciate by 2% of the daily fixing on each day, the RMB has fallen by 2% against the US dollar since the start of February with USD/CNY standing at 6.22 on March 24. However, despite the recent curr