The Depreciation Of The Renminbi Has Led To Heavy Losses On The "Hot Money" Arbitrage.

< p > since this year, the "a href=" http://www.91se91.com "RMB" /a "has experienced an unprecedented devaluation, and the depreciation rate has been close to 3%.

The depreciated renminbi not only offset the increase in the whole year of 2013, but also directly led to the reversal of the appreciation of the renminbi from the expected appreciation to the depreciation.

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< p > at the same time, in the past March, the RQFII-ETF fund also encountered a rare large-scale redemption. Many Hongkong banks also raised interest rates on RMB deposits in recent years, and all other phenomena showed that after being cut off arbitrage space, hot money was accelerating to escape.

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< p > < strong > RQFII-ETF suffered a substantial redemption < /strong > /p >

The P > RQFII fund is experiencing a rare massive redemption.

According to Wind data, as of March 27th, the 14 RQFII funds included in the statistics were up to 613 million 500 thousand redemptions, of which the A50 redemption number in the South was 468 million 500 thousand, representing a net outflow of 3 billion 900 million yuan of funds.

In addition, many funds, such as Boshi FA50, Huaxia Shanghai and Shenzhen 300ETF, Yi Fang Da Zhong certificate 100ETF, also suffered a substantial redemption.

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< p > prior to January, the total number of 14 RQFII funds included in the statistics was up to 229 million 400 thousand fund units. Among them, the southern A50 was 192 million net purchases, equivalent to 1 billion 700 million yuan of inflow capital.

However, this situation has changed quietly in February of last year. Although the southern A50 still received a certain amount of net purchase, the overall RQFII share showed a reverse trend, with a redemption share of 9 million 870 thousand.

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< p > it is worth noting that < a href= "http://www.91se91.com/news/index_cj.asp" > H shares < /a >, since March, the Hang Seng Index of the state-owned enterprises has dropped by 0.18%, almost finishing a small V inversion.

Meanwhile, according to EPFR Global statistics, the net outflow of equity funds in China from March 12th to March 19th exceeded US $1 billion 500 million, the largest weekly net outflow since January 2008.

Among them, the amount of capital redemption of investors on China's stock base has also set a historical record.

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< p > Hongkong fund industry has pointed out that since March, RQFII-ETF redemption, H-share decline and other inconsistent data, although reflecting some of the hot money out of China's data weak concerns, but in fact it is due to the depreciation of the renminbi, resulting in lack of arbitrage space, pushing the emergence of hot money to accelerate the escape.

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< p > < strong > RMB a href= "http://www.91se91.com > > arbitrage" /a > loss "/strong > /p >

This year, the RMB has suffered an unprecedented depreciation, and its amplitude has been close to 3%. P

From the point of view of the spot exchange rate of RMB against the US dollar, the closing price in January 14th was 6.0406 yuan, until yesterday, closing price was 6.2103 yuan, or 2.85%.

The sharp depreciation of the renminbi not only offset the increase in the whole year of 2013, but also directly led to the reversal of the appreciation of the renminbi from the expected appreciation to the depreciation.

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< p > China BOC International commented that the exchange rate of RMB against the US dollar has depreciated by about 3% since the beginning of this year, and the depreciation rate has been larger. At present, the expectation of RMB appreciation has been broken and replaced by a blank view of the RMB. Under such circumstances, the central bank has no need to further guide the depreciation of the exchange rate.

If the above analysis is correct, then the pace of depreciation of the RMB exchange rate may slow down or even stop in the future. This may again be beyond the expectations of the currency speculators.

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< p > according to the statistics of the international settlement bank (BIS), the total amount of loans granted by foreign banks in Hongkong to the mainland has reached 430 billion US dollars. Hongkong bank's net debt to the mainland accounts for nearly 40% of the total debt.

The demand for such loans usually increases with the appreciation of the renminbi and decreases when the value of the renminbi declines.

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The expected change is no doubt a blow to the renminbi arbitrage. The Hongkong banking industry pointed out that "the devaluation of the renminbi will bring a devastating blow to the arbitrage pactions that bet on the appreciation of the renminbi."

Many investors borrow money from Hongkong's banking industry, and then buy RQFII and other related RMB assets to arbitrage.

According to the magnitude of the depreciation of the renminbi since the beginning of this year, the losses of investors in arbitrage pactions can reach up to US $14 billion.

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There are mainly four ways of arbitrage in the P > RMB: spot exchange spread arbitrage on shore, NDF and DF difference arbitrage, offshore shore interest rate differential arbitrage and cross currency interest spread arbitrage.

A research report by Monita pointed out that in the channel of RMB appreciation, interest rate difference and remittance difference will bring about a bumper harvest.

Specifically, when A deposits in the territory and requires the issuance of a letter of credit to an offshore partner B, B obtains the corresponding amount of foreign exchange loans in accordance with the offshore exchange rate, and pays the foreign exchange to A by importing goods to A; A convertibility of foreign exchange into Renminbi at the shore exchange rate.

After the expiration, A obtains the domestic renminbi "deposit" capital interest and exchanges the principal and interest of foreign exchange loans payable at the maturity exchange rate.

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< p > < strong > Hong Kong Silver interest rate to fight for RMB deposits < /strong > /p >

< p > it is worth noting that Hongkong's offshore renminbi deposits have also undergone subtle changes as the appreciation of the renminbi is expected to reverse.

Some customers, based on the expectation of RMB appreciation, are in the panic of selling RMB.

In order to deal with this situation, many banks in Hongkong began to offer a way to raise interest rates.

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"P", such as ICBC Asia, recently announced that from March 14th to April 30th this year, a phased increase in annual interest rate for RMB deposits will be launched, with a maximum annual interest rate of 4%, which is temporarily the highest in Hongkong, with an initial deposit of 100 thousand yuan and an average of 3.3% in the whole period.

In recent years, the Bank of China has launched a concession, with an annual interest rate of 3.4%.

The offer must be opened with new funds and divided into three stages. The first phase will be 2.5% for the first 90 days of opening deposit day. The second stage is the deposit period from ninety-first to 180 days. The deposit interest rate is 3.3%, and the third period is from 181st days to 288 days, with the annual interest rate 4%.

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< p > Standard Chartered Hongkong has also announced recently that from March 21st to the end of April, new funds of 20 thousand yuan have been put into operation, and the 6 month fixed deposit interest rate has reached 3.2 yuan, and the interest rate is 320 yuan at the maturity date. It is only applicable to new customers, that is, no bank products or services have been held in the bank in the past 12 months, except for credit cards.

Wang Weixian, director of deposit and mortgage business in Standard Chartered Hongkong and greater China, said that the introduction of short-term concessions aims to attract more renminbi, which is an effective way to attract new customers, whether for high-end or general customers.

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< p > in addition, DBS "a href=" http://www.91se91.com/news/index_c.asp "> Bank" /a "(Hongkong) also announced the increase of RMB interest rate deposit rate, from 2.8% to 3%.

At present, Hongkong's banking sector still maintains high confidence in RMB business.

Chen Mingqiao, head of Hongkong global market, Standard Chartered, said that the global market was relatively volatile in the second half of the year when the external market atmosphere was uncertain. However, the RMB business also had double-digit growth. The first two months of this year also maintained a good momentum. QE is confident that there will be double-digit growth this year.

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