R5’s Jon Vollemaere was featured in an FX Week article on the HKMA and PBoC’s extension of CNY access to Hong Kong Stock Connect investors.
Jon commented on the development, “It opens the RMB door just a little bit more, but mainly this is a step to help solve the liquidity issue with CNH,” and, “There simply isn’t enough CNH in daily circulation and that creates issues for same-day Stock Connect and Bond Connect on busy days.”
The article comes just a week after R5 was invited to the 10th Economic Financial Dialogue (EFD) in London.
On the EFD agenda was increasing trade relationships between China and the UK, especially in relation to Belt and Road initiatives.
Two policy outcomes that will positively impact R5 are –
– Both sides agree to enhance cooperation on capital market connection, financial market infrastructure and regulation and cross-border use of RMB.
– Both sides commit to support UK RMB clearing banks to expand business, continue to promote development of the offshore RMB market in London and encourage innovation of RMB-denominated financial products.