Investing in Asian Offshore Currency Markets: The Shift from Dollars to Renminbi (Global Financial Markets)

The offshore currency market is a foundation of offshore bond market, helping well-established corporations in global financing. Following the global financial tsunami in 2008 and European debt crisis in 2009-2011, this book aims to document the latest issues, challenges, trends and thoughts relating to offshore currency markets in Asia. Investing in Asian Offshore Currency Markets provides comprehensive coverage of the development of offshore currency trading in Asia, and in particular, the issues and challenges of developing the Renminbi as an international currency. Brought together by an editor team with extensive academic and market experience, it features contributions from leading bankers, analysts, bank supervisors, economists and academics, providing timely coverage of: market microstructures; legal requirements; risk management issues; and challenges regarding emerging Renminbi market outside mainland China. The Renminbi offshore market is still in the process of rapid development. The contributions in this book provide insight and detailed discussion on how an emerging market currency goes through the process of internationalization. This process will continue with gradual liberalization of capital account in Mainland China and interest rate fixing for Renminbi in offshore interbank markets. The Renminbi offshore market starts from Hong Kong and extends to Taiwan, Singapore and London but its development faces significant challenges. These challenges are addressed in this book Front Matter....Pages i-xvi Front Matter....Pages 1-1 Determinants of the Distribution of Eurodollar Deposits in Offshore Financial Centres....Pages 3-14 Why Should All the Eurobonds Issued by Indian Banks Carry Uniform Regulatory Credit Risk Charge?....Pages 15-23 US Dollar Interest Rate Fixings in Offshore Currency Markets: The Puzzles of Volatility and Funding Cost....Pages 24-37 Front Matter....Pages 39-39 The Development of the Renminbi Currency Market....Pages 41-53 Price Disparities between Mainland China’s Onshore and Offshore Financial Markets....Pages 54-69 Comparative Risk Analytics between Asian Offshore US Dollar Bonds and Chinese Yuan Bonds from an Indian Commercial Bank’s Perspective....Pages 70-85 China’s Offshore Yuan Market: Inside the Engine Room of the World’s Next Trade Currency....Pages 86-97 Rational or Irrational? Chinese Capital Control Rules in the Context of Internationalizing Renminbi....Pages 98-135 From Greenback to Redback: The Journey of Renminbi from Local Circulation to Reserve Currency....Pages 136-156 Legal and Documentation Issues of Offshore Chinese Yuan Derivative Transactions....Pages 157-165 The Challenges and Opportunities for Renminbi Investment Product Development in Hong Kong....Pages 166-190 Promise or Peril: Opportunities and Challenges of Renminbi Trade Settlement and Financing....Pages 191-198 Eurodollar Banking and Currency Internationalization....Pages 199-214 Feasibility of Offshore Renminbi Market in Hong Kong....Pages 215-218 Renminbi: The Past, the Present and the Future....Pages 219-223 Renminbi Globalization: A Taiwan Perspective....Pages 224-234 Back Matter....Pages 235-240