Money market funds have so far failed to find favour with treasurers, except in China. A new product in Hong Kong could change all that – if high fees don't get in the way.
China's decision to reduce bank reserve requirements, the third such move this year, surprised no one. But the timing and nature of the latest cut are clearly linked to the risk of a trade war.
From today Chinese financial institutions no longer have to set aside 20 per cent of the value of dollar purchases. For treasurers, that means lower costs and an opportunity to hedge.
China has given some conditional lifting to its suspension of net capital outflows from the cross-border renminbi cash pools in the country. But the criteria for firms eligible for the relaxation remain unclear.
Knorr-Bremse treasurer Ernest Mui has called for China to establish more Shanghai-style free trade zones in order to balance China’s corporate treasury needs.
China will likely free up deposit rates within two years, hopefully helping end the need for corporates to park cash with dodgy wealth management products, economists believe.
CT has established an interactive treasury webcast service. With access to exclusive, upcoming interactive events, treasurers can watch and listen in live or download the archive of webcasts at a convenient time.