Hong Kong Exchanges and Clearing Limited (HKEX) and Thomson Reuters have signed an agreement for the creation of a new series of Renminbi (RMB) indices.
The new index series will give the world benchmarks that reflect the development of the RMB’s effective exchange rate against other major currencies and are designed to be transparent, tradeable and compliant with the International Organisation of Securities Commission’s principles for financial benchmark governance and administration. Details of the new index series will be announced in the next few weeks.
“We are pleased to announce new benchmarks to support the internationalisation of RMB and Hong Kong’s position as a key hub for connecting international and Mainland markets and their participants,” said HKEX Chief Executive Charles Li. “Our RMB indices will serve as the basis for products to help investors manage currency risk, which will help maintain HKEX’s leadership in introducing RMB products for the offshore market.” As a pioneer in RMB product development, HKEX launched the world’s first physically delivered RMB currency futures in September 2012, a contract that is now the most liquid listed RMB futures contract in the world with US$312 million notional traded daily and over US$2.8 billion in open interest in the first quarter of this year.
“In working with Thomson Reuters, we have a partner that provides industry benchmarks for foreign exchange trading through strong connections to participants in the global foreign exchange market. This partnership will enable us to reach a broad community with indices that tell the continuing RMB internationalisation story.”
“Thomson Reuters and HKEX have a long-standing partnership which dates back to the formation of HKEX and has delivered a number of industry-leading solutions,” said Sanjeev Chatrath, Managing Director, Financial & Risk, Asia Pacific at Thomson Reuters. “We are pleased to further strengthen our relationship through the announcement of our new co-branded RMB index series.
“Thomson Reuters sits at the heart of global financial markets as a leading independent benchmark operator as well as interbank primary market and dealer-to-client liquidity provider for CNH* transactions. This partnership reaffirms Thomson Reuters’ open platform and trusted philosophy, and will go a long way to help market participants understand, analyse and capture opportunities that the RMB’s internationalisation presents at a time of increasing significance of RMB on the world stage.”
* CNH = RMB outside Mainland China.