China FX option reform to improve corporate risk management

Change in regulations will allow corporates to sell forex options

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The relaxation of regulations to allow Chinese corporates to sell foreign exchange options will lead to better risk management and is part of a wider liberalisation in the onshore options market as regulators move to introduce more hedging alternatives in the face of a more volatile renminbi, say dealers. The yuan has depreciated by 2% against the US dollar this year and briefly touched 6.25 to the dollar in May. USD/CNY is currently trading at 6.17 as of August 6, following several years of