CNH Tracker-A booster shot for the Hong Kong market

Wed May 1, 2013 11:19pm EDT

By Saikat Chatterjee
    HONG KONG, May 2 (Reuters) - Latest reforms in the offshore
yuan markets will help banks overcome periodic shortages of cash
and signals a new pipeline of products in a market that has
stagnated in recent quarters.
    In a series of steps last Thursday, the Hong Kong Monetary
Authority, the city's de-facto central bank, removed trading
limits and dismantled mandatory reserve requirements for banks
trading the offshore yuan. 
    The measures taken were essentially two-pronged in approach:
to help investors manage their interest rate exposure on the
back of a growing bond market and offer banks more yuan funds to
boost their trade settlement business.Even as the yuan hits a series of record highs guided by the
People's Bank of China, doubts are rising on how far the
currency can go with valuations already near the top end of
historic ranges.        
       
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THOMSON REUTERS SPEED GUIDES
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