Forex Flash: CNH liberalization to facilitate integration with onshore CNY - ANZ

FXstreet.com (Barcelona) - Yesterday, the Hong Kong Monetary Authority announced that improved market liquidity and growing maturity of the offshore RMB (or CNH) market led them to decide the removal of the Net Open Position (NOP) limit (of 20%) and liquidity ratio requirement for the offshore RMB market, the ANZ explained in a note to clients earlier today.

According to Irene Cheung, FX Strategist at ANZ: "We think that the move will further facilitate the development of the CNH market and promote progressive integration with the onshore CNY market, via the RQFII (Renminbi Qualified Financial Institutional Investors) scheme. We expect the spread between the CNH and onshore yields to start narrowing once more quotas are allotted under the expanded RQFII scheme..."