Offshore Renminbi Is The Biggest Weekly Gain Since October?

Friday (December 25th), a well-known foreign media report pointed out that offshore renminbi is expected to create the biggest weekly gain in 2 months.

After China announced the extension of its trading hours on shore, and indicated that it would take action to liberalize its capital account, the market speculated that the demand for RMB would increase.

According to the data compiled by foreign media, the RMB exchange rate rose 0.12% to 6.5375 in the offshore Hongkong offshore market.

The offshore renminbi has risen 0.29% this week, the biggest weekly gain in 1 weeks as of October 30th.

Meanwhile, the RMB exchange rate on the Shanghai market has risen for sixth consecutive trading days.

According to the quotation of China foreign exchange trading center, the exchange rate rose 0.08% to 6.4714 on Friday and the weekly rate rose to 0.16%.

The Central Bank of China (PBOC) raised the central parity of RMB against the US dollar by 0.06% to 6.4713 within days.

On Tuesday (December 22nd), the State Administration of foreign exchange said in a notice that China will promote RMB capital account convertibility in an orderly manner, while effectively preventing and resolving cross-border capital flows risks.

Chen Ji, a senior research fellow at Bank of communications in Shanghai, said that all these initiatives to promote capital account convertibility may trigger more in the short term.

And risk, but in the long run it will be beneficial.

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Because the fabric will be relatively quiet during the Christmas and New Year holidays, the renminbi may fluctuate in the next week.

Wednesday (December 23rd) China

Its website announced that since January 4, 2016, the interbank exchange market trading system has been postponed from 23:30 to 23:30 at the current time of operation in Beijing on a daily basis.

The central bank also said that allowing foreign banks to participate in the offshore exchange market under certain conditions would help to narrow the price difference between offshore and offshore RMB.

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The exchange rate of China's foreign exchange trading center at 11:00 today is 6.4720 against the US dollar.

Traders said the market liquidity decreased significantly during Christmas holidays.

Foreign investment banks have entered the vacation mode to reduce the purchase of foreign exchange, and Chinese banks still have a settlement plate, which will push up the RMB exchange rate.

During the Christmas season, offshore renminbi market liquidity also declined, and market sentiment was cautious.

Other traders said Friday is Christmas, and there is no liquidity. If the dollar weakens, it will be a good opportunity to buy foreign currency. "If we go further down, we will buy a little bit of land. If we do not move, we will not move. We will see that there will be a trend in the market."

Standard Chartered is expected to take more measures in the reform of the RMB mechanism, such as increasing the flexibility of cross-border investment and remittance, expanding the free trade area and further opening capital account.

"We are confident that China will continue to liberate its currency at an appropriate speed and will become the world's third largest currency before 2020," Hong Pizheng, chief executive of Greater China and North Asia, said.

In the international currency market, the US and most European markets closed on Christmas holidays on Friday.

The US dollar fell against a basket of currencies on Thursday. It is expected to record its biggest monthly decline since April, after traders resumed profits in the US dollar after the US raised interest rates last week.