| ID | 079059 |
| Title Proper | Renminbi Derivatives |
| Other Title Information | recent development and issues |
| Language | ENG |
| Author | Peng, Wensheng ; Shu, Chang ; Yip, Raymond |
| Publication | 2007. |
| Summary / Abstract (Note) | This study reviews the developments in the onshore and offshore renminbi derivatives markets. The onshore market has seen a rapid build-up in the market infrastructure and price discovery mechanism in the past year, with empirical evidence suggesting that its pricing is increasingly determined by financial fundamentals, such as the covered interest rate parity. However, the growth of the market has been restrained by restrictions on the participant base, limited variations in the RMB/US$ exchange rate, market participants'lack of technical capacity and experience, and inadequate supporting financial market infrastructure. The non-deliverable forward (NDF) market, concentrated in Hong Kong and Singapore, is more developed, but has the drawback that its pricing is not tied to financial fundamentals. The comparison between onshore and offshore markets suggests that two issues are of particular importance for future derivatives market development in China: the balance between regulation and development, and the relationship between onshore and offshore markets. |
| `In' analytical Note | China and World Economy Vol. 15, No.5; Sep-Oct 2007: p1-17 |
| Journal Source | China and World Economy Vol. 15, No.5; Sep-Oct 2007: p1-17 |
| Key Words | China Development ; Renminbi Derivatives ; Onshore Market ; China |