Thomson Reuters to further facilitate internationalization of renminbi
Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, will begin compiling and publishing the Treasury Markets Association’s (TMA) offshore renminbi Hong Kong Interbank Offered Rate benchmark (CNH HIBOR benchmark), following its appointment as the official calculating agent for this key industry interest rate benchmark. This provides a formal benchmark for market participants to reference when pricing renminbi loan and interest rate contracts.
The calculation of the CNH HIBOR benchmark is based on the rate contributions by 16 regional and global banks. The benchmark is calculated daily and is published at 11:15 am every trading day in Hong Kong. The reference interest rate will be available on Thomson Reuters Eikon, the company’s next generation desktop for financial markets, as well as on the TMA’s public website.
“The CNH HIBOR benchmark will be a significant piece of financial infrastructure for the offshore RMB market,” said Peter Pang, Chairman of the Executive Board of the TMA and Deputy Chief Executive of the Hong Kong Monetary Authority. “Its launch will support the growth of the RMB market by providing a benchmark for loan facilities. The benchmark will also facilitate the development of a variety of RMB interest rate products, increasing the ability with which market participants can manage the interest rate risk of their RMB businesses.”
Thomson Reuters has been at the heart of bringing offshore renminbi reference rates to foreign exchange markets. Since 2011, the company has compiled and published the TMA’s Spot USD/CNY(HK) benchmark, Hong Kong’s first offshore renminbi spot fixing rate. Thomson Reuters continues to work closely with leading market participants in the global markets in which it operates to offer representative benchmarks that serve to connect and empower the financial marketplace.
“Hong Kong’s offshore renminbi (CNH) market has seen significant developments in a comparatively short period of time,” said Michael Tsang, managing director, North Asia, Thomson Reuters. “With both an industry-leading Spot USD/CNY(HK) benchmark and now a CNH HIBOR benchmark, Thomson Reuters is committed to working with pioneering industry players to develop the market infrastructure and facilitate the expansion in the diversity and sophistication of CNH products.”
“Interbank lending activities will likely benefit from the introduction of a market reference rate and this will in turn help expand the range of CNH products available, including CNH loans and risk-hedging instruments,” said Mr David Wong, Deputy Chief Executive of Bank of China (Hong Kong). “A further diversification of CNH products will encourage the increasing use of RMB globally. As a key player in the offshore RMB market, we are pleased to be involved in this market development.”
“This development will be welcomed by the market, as the CNH HIBOR benchmark could serve as a benchmark for a number of CNH products including bank loans, floating-rate dim sum bonds and interest rate swaps,” said Frances Cheung, senior strategist, Asia ex-Japan Global Markets Research, Credit Agricole CIB.