CNH liquidity squeeze drives up Hibor volatility

RMB payment exceeds asset growth in Hong Kong, giving banks a funding headache

Yuan jeans

A rapid increase in the use of renminbi for payments in Hong Kong has not been matched by a growth in CNH assets with the resulting liquidity shortage as banks struggle to settle trades causing almost threefold spikes in overnight Hibor during the first quarter of 2015.

The volume of renminbi settlements in Hong Kong has increased rapidly since 2014 with the average daily transaction levels on the real time gross settlement (RTGS) system breaking the one trillion yuan ($161 billion) barrier in t

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 indvidual account here: