HONG KONG, June 27 The yuan was set at 6.4753 to
the U.S. dollar in the Hong Kong offshore market on Monday, the
first-ever such fixing for the Chinese currency in a move that
banks hope will help further deepen the burgeoning market and
spawn more trading instruments.
The daily yuan fix in the CNH offshore market is
seen as a key step because it gives banks a common rate on which
to base the trade and settlement of a wider variety of products,
especially derivatives such as FX options and interest-rate
The fix for the dollar/yuan offshore rate -- known as CNH
market to distinguish it from the mostly closed
CNY onshore market -- at 11 a.m. local time each day
from rates provided by 15 banks .
Hong Kong's Treasury Markets Association launched the fix
last week. Thomson Reuters is the calculating
and distributing agent for the fixing rate on the menu page
Activity in the offshore yuan market has soared this year,
with surging yuan deposits in Hong Kong spurring daily currency
trading estimated at about $1 billion each day and sparking a
flurry of bond issues.
Beijing has promoted the offshore yuan market as a way for
its big companies to settle trade in its local currency and help
wean the economy off its reliance on the dollar.
But Chinese authorities have also sought to limit
speculation on yuan appreciation in the fledgling market.
Last week China's central bank tightened controls on the
offshore yuan market, requiring that offshore banks settling
trade in CNH tighten checks on whether currency transactions are
tied to real trade and asking the banks to check for "abnormal"
Banking and regulatory sources in Hong Kong have told
Reuters that China is working behind the scenes to tighten the
screws, trying to shape the structure of the market through
derivatives regulation and financial bureacracy.
(Reporting by Eric Burroughs; Editing by Ramya Venugopal)