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.
It's like nothing China's treasurers have seen in the past 10 years; a toxic combination of defaults, US rate hikes, a downturn at home, regulatory interference and trade tensions are killing bond issuance.
It’s one of the Asia Pacific’s fastest growing economies, but it can also be one of the more volatile. A central banker tells corporate treasurers what to watch out for in the Southeast Asian powerhouse.
A 20% reserve requirement set by Chinese regulators on dollar/Rmb forward contracts has an instant impact. As predicted, futures contracts are moving offshore.
Treasurers tell CT what a return to the reserve requirement on forward trading – which puts the brakes on renminbi-US dollar forwards – will mean for their operations.
India’s central bank increased the repo rate for the second time in two months, but the potential for a slowdown means these rate increases could also be reversed.
Fearing China's currency could plunge to Rmb7 or Rmb7.50 to the dollar, a treasurer hedged mammoth debts while staying in line with the principles of IFRS9.
Even for the smallest company, currency risk is always present. The options for treasurers are manifold, but good hedging practice starts with knowing your business.
A 7% slump in the renminbi's value as the winds of trade war blow has an unwanted consequence: 2016-style capital controls and difficulty in withdrawing money from the country.
