Market prepares for rising RMB

Interest rate swaps referencing the widely used 7-day repo benchmark in China adjusted on Monday following the central bank's announcement over the weekend that it would end the renminbi peg to the US dollar, instead switching back to the basket of currencies used as a reference prior to mid-2008.

Swap traders expect the move to create enough renminbi appreciation that the central bank will be able to hike rates more slowly – even though the daily trading band applied to the renminbi, which allo