Chinese banks look at swaptions pricing

Switch to market rate for loans prompts lenders to explore hedging tools

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China’s four large state-owned banks are looking at pricing renminbi interest rate swaptions – a move some see as an indication that the authorities are paving the way for cheaper and more flexible hedging for domestic firms.

Doubts over liquidity in the underlying swaps market are tempering optimism over the new instrument, though.

“It is possible that this product will be offered soon, but you need to distinguish between the regulatory deliberation of approving the product and the economic

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