While analysts generally believe China’s latest cuts would release more liquidity into the renminbi market, it is still too early to get excited, CT warns.
China’s central bank has not given any indication it will widen the renminbi trading band, as the cabinet instructed last week, which has disappointed market participants.
Large Chinese corporates such as Tencent and Alibaba told CT they would consider investing in certificates of deposit, a cash instrument that China’s central bank made available to corporates last week.
To provide more options for currency hedging, India has relaxed several restrictions to facilitate currency derivatives trading in the exchange market for both domestic and foreign participants.