RMB Solutions

Track RMB internationalizationon the Bloomberg Terminal.

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Contents
01

RMB as an international payment currency

02

Offshore RMB liquidity

03

Investing in China’s capital markets

04

RMB as a funding currency

06

FX market outlook

07

Central bank support

08

China’s capital flows and foreign investment

10

RMB internationalization – key functionality

Track RMB internationalizationon the Bloomberg Terminal.
A new era of liberalization is redefining the way the world engages with Chinese financial markets.
Bloomberg has the data, local market expertise and the financial technology needed to help market
participants access China’s financial markets.

RMB as an international payment currency
Since launching its initial trade pilot program in July 2009, continuous regulatory reform has increased
the attractiveness of the RMB as a payment currency. While off from its 2015 highs, the RMB remains
one of the most used payment currencies as measured by SWIFT. Initiatives such as One Belt, One
Road will likely boost future usage.
World Economic Statistics
ECST <GO> — Despite thefact that the RMB is one of
the most used currencies asmeasured by SWIFT, overall
use of RMB as a payment
currency remains small relative
to the size of China’s economy
and its export sector.

BloombergIntelligence Economic
Research Dashboard
BI ECONG <GO> — RMB is
the second most frequently
used Asian currency for
payments after the JPY.

Track RMB internationalization on the Bloomberg Terminal

Offshore RMB liquidity
Offshore RMB deposits are no longer limited to Hong Kong – increased global use of the currency
has helped build balances in a variety of offshore RMB clearing centers. However, despite animproved FX outlook and increased deposit rates, offshore RMB liquidity has been reduced bycurbs on currency outflows from China and because of greater investment inflows to mainland
capital markets.
World Economic Statistics
ECST <GO> — CNH depositsin Hong Kong have dropped
nearly 50% from the 2014
peak as investment inflows
to China’s capital markets
have increased pace.

Graph Curves
GC <GO> — Tight liquidity
conditions in the offshore
market have led to a risein funding costs.

2Track RMB internationalization on the Bloomberg Terminal

Investing in China’s capital markets
Investment flows to mainland China will continue to rise as more index providers such as MSCI
and the Bloomberg Barclays Indices include Chinese securities in their most widely used equity
and fixed income benchmarks.

World Economic Statistics
ECST <GO> — The numberof RMB Qualified Foreign
Institutional Investor (RQFII)
firms is rising along withquotas as investors prepare
for index inclusion.

Mutual Market Access
MMA <GO> — Greater
northbound flows under
the Shanghai – HK Stock
Connect are helping easecapital outflow pressure
on the RMB.

3Track RMB internationalization on the Bloomberg Terminal

Mutual Market Access
MMA <GO> — The inflow offunds from Hong Kong toShenzhen peaked ahead of
MSCI’s announcement of the listof A shares to be included in its
MSCI Emerging Market Index.

RMB as a funding currency
RMB borrowers have a range of funding tools available to them on both sides of the border.
The Panda bond market saw record new issuance volumes in 2016, but offshore rates arekeeping the CNH and Formosa bond markets competitive in 2018.
Fixed Income Search
SRCH <GO> — CNH bondnew issue volumes are on
the rise as of May 2018.

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Track RMB internationalization on the Bloomberg Terminal

Fixed Income Search
SRCH <GO> — As of May 2018,
CNH Formosa bond new issue
volumes have already doubled
those in 2017.

Fixed Income Search
SRCH <GO> — The Panda
bond market has blossomed
in recent years, but remains
roughly one-tenth the sizeof the CNH bond market.

5Track RMB internationalization on the Bloomberg Terminal

FX market outlook
With volatility expected to return, market participants will need to carefully manage their RMB
exposures. Market expectations are for the RMB to end 2018 with a slightly stronger offshore
and weaker onshore FX rates.

Volatility Comparison
VOLC <GO> — The spread
between CNH and CNY has
narrowed in recent years.

World Economic Statistics
ECST <GO> — Consensus
forecasts call for a slightstrengthening in the CNY
vs. the USD over thenext 4 years.

6Track RMB internationalization on the Bloomberg Terminal

Central bank support
RMB internationalization has received strong support from central banks with more than
RMB 3 trillion of bilateral currency swap agreements in place to promote RMB businessin local markets. Since joining the IMF’s Special Drawing Rights (SDR) Basket in October
2015, central banks have also begun to add RMB to their foreign exchange holdings.
Economic Workbench
ECWB <GO> — Reserve
diversification has resulted inincreased RMB holdings, oneof the reasons the USD’s shareof global reserves has dropped.

Economic Workbench
ECWB <GO> — The volume
and number of currency swap
agreements negotiated by thePBOC rose substantially aheadof the IMF decision to include
the RMB in its SDR basket.

7

Track RMB internationalization on the Bloomberg Terminal

China’s capital flows and foreign investment
Onshore market liberalization has been key to easing capital outflows and promoting RMBinternationalization. However, the government’s campaign to strengthen capital controls and reinin overseas investment may have had a temporary negative impact on RMB internationalizationand its “going global” strategy. Acquisition activity on both sides of the border is down fromrecent years.
World Economic Statistics
ECST <GO> — China’s capitalflow gauge shows a swingto inflows.

Mergers & Acquisitions
MA <GO> — Foreign acquisition
by Chinese firms has slowed
after a buying spree in 2016as the Chinese government
introduced stricter guidelines.

8Track RMB internationalization on the Bloomberg Terminal

Mergers & Acquisitions
MA <GO> — Foreignacquisition of Chinese firms
has begun to slow in 2018.

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Track RMB internationalization on the Bloomberg Terminal

RMB internationalization – key functionality
RMB cross-border payments

RMB funding

Supply chain analysis		SPLC <GO>

Spread to benchmark 		

YAS <GO>RMB as % of world		payment currencies

SWFTCNY Index <GO>

Asset swap calculator		

ASW <GO>

CNH swap calculator 		

SWPM <GO>

RMB payment			
currency ranking

SWFTCNYR Index <GO>

CNH bond news			

NI DIMSUM <GO>

China cross-border 		
RMB settlement- outbound FDI

RMBSOFDI Index <GO>

Panda bond news			

NI PANDA <GO>

CNH investment			
grade bond average yield

BOCRINVY Index <GO>

Hong Kong remittances for		
renminbi (RMB) cross-border
trade settlement

HKRDCBTS Index <GO>

CNH 3-year cross			
currency swap

CGUSSW3 Curncy <GO>

China government		bond tickers

GGR <GO>

Offshore RMB liquidity
CNH deposits in Hong KongHKRDTTL Index <GO>

CNH loans								LSRC<GO>
Loan type: Dim Sum

CNH deposits in Singapore

SIRMBDEP Index <GO>

CNH bond issuance		

SRCH @DIMSUM <GO>

CNH deposits in South Korea

KORRCNY Index <GO>

Panda bond issuance		
SRCH <GO>					Security type: Panda

CNH deposits in Taiwan		
TWRMOTTL Index <GO>					TWRMTTL Index <GO>
CNH deposits			
in the United Kingdom

RMUKDHI Index <GO>

CNH deposit rates curve		

YCMM0199 Index <GO>

CNH HIBOR fixing curve		

GC MM227 <GO>

CNH rates								OTC CNY CNHRATE <GO>
OTC HKD CNHRATE <GO>

Kimchi bond issuance 		
SRCH <GO>					Security type:Korea					Kimchi bonds
CNH Formosa bond issuance
SRCH <GO>					Security type: Formosa					Currency type: CNY
PBOC base lending rates		CHLR12M Index <GO>					CHLR1-5Y Index <GO>					CHLR5YA Index <GO>

China’s capital markets
RQFII approved quotas		

CNQFRFII Index <GO>

RQFII number of firms		

CNQFRFIN Index <GO>

Mutual Recognition of Funds

MRF <GO>

Shanghai-Hong Kong		Stock Connect

MMA <GO>Shenzhen-Hong Kong		Stock Connect

MMA <GO>

10Track RMB internationalization on the Bloomberg Terminal

Central bank support

Foreign exchange

China bilateral currency		swap agreements

CNCZSWLN Index <GO>

Foreign exchange holdings		
in Chinese renminbi as apercentage of total allocated

CCFRCNYP Index <GO>

Spot on and offshore		

ALLQ <GO>

Forwards on and offshore		

FRD <GO>CNY vs CNH			

HS <GO>

Offshore trading hubs		

CNHO <GO>

24-hour trading activity		

FX24 <GO>

Forward and rates ARB		FXFA <GO>

CNH gold contract		

CGSE <GO>

FX fixings			

BFIX <GO>

RMB oil futures			

SCPA COMDTY <GO>

Option vol surfaces		OVDV <GO>

Option pricing			

OVML <GO>

RMB indices

Volatility comparison		

VOLC <GO>

Index browser			IN <GO>

FX forecasts			

FXFC <GO>
WCRS <GO>

China estimated			
capital flows

CNNMHTMY Index <GO>

World currency ranker		
USD/CNY non-deliverable		
forward pricer

XNDF <GO>

Renminbi Globalisation		Index (RGI)SCGRRGI Index <GO>

FTSE - BOCHK Offshore		RMB Bond Index

TRMBCNAL Index <GO>

Citigroup Dim Sum		
Bond Index

ALLX SBDS <GO>

Onshore trading platform		OTC CNY <GO>					CFETSFX <GO>

CNH commodities

11Track RMB internationalization on the Bloomberg Terminal

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12

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