Offshore RMB hedging costs soar as CNY/CNH basis hits record

Corporates "don't have a choice" about hedging

shutterstock-273028175

Continued downward pressure on the renminbi against the US dollar has driven hedging costs up massively in the offshore market as tight liquidity drives a record basis between the offshore (CNH) and onshore renminbi (CNY) forward rates. Despite these rising costs, China corporates continue to hedge offshore as the CNH market is the only way to risk-manage their US dollar borrowing exposures.

"We see very active demand for CNH hedging by corporates," says Simon Lau, head of rates, foreign

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: