As the trade war threatens to spill over into a currency war, China’s renminbi is back in the spotlight. CT spoke to Deutsche Bank about key corporate considerations when hedging the Chinese Rmb.
Markets are skittish, prone to starting at shadows or gorging themselves on rumours. Is China’s ‘counter-cyclical bounce’ just the latest piece of scuttlebutt to affect the currency or is the writing on the wall?
Cherry-picking corporate treasurers are causing problems for regional financial institutions which are losing wallet share to their more nimble counterparts.
In one month, China’s foreign exchange regulator has fined 48 corporates, banks and individuals. European chemistry giant Solvay, as well as HSBC, are on the list.
China’s leading optical device manufacturer has seen the equivalent of $29 million wiped out on the back of the renminbi’s devaluation. Meanwhile, the PBoC’s latest move is adding to its pain.
As trade tensions deepen, charting a path through increasingly desynchronised economies is becoming more difficult. Citi’s lead Asia economist tells CT what treasurers need to prepare for.