This March the People’s Bank of China (PBOC) moved to double the RMB’s daily trading band from 1 percent to 2 percent and ramped up relevant exchange rate volatility. And then, horror of horrors, the previously perpetual trend of RMB appreciation has flipped the script and depreciated 3.4% from its January top against the dollar.
Last year, the RMB entered the list of top 10 most traded currencies for the first time, according to the latest triennial foreign exchange (FX)market survey by the Bank for International Settlements (BIS). This made the RMB the ninth most actively traded currency with a share of 2.2 percent in global FX volumes after volumes trebled from $34 billion (U.S.) per day in April 2010 to $120 billion (U.S.).
Other signs suggest RMB trading momentum is continuing. In February this year, Thompson Reuters reported that the CNH has become the second largest traded FX currency on its relationship trading platform.
Check out the rest of the interview with Malcolm Baker, senior director of FX and interest rates products at CME Group, here.
