One of the leading Chinese banks, the Industrial and Commercial Bank of China (ICBC), is taking a big step in changing liquidity conditions on the Chinese yuan market. The institution, which is the largest bank in the world by market cap and total assets, is committing to substantially facilitate renminbi trading.
ICBC is the first Chinese bank to continuously stream Chinese yuan quotes to the market via FXall and Electronic Trading. Both trading platforms are owned and operated by Thomson Reuters.
The move follows ICBC’s decision to become the first Chinese bank to stream CNH prices during Asian trading hours. The company’s Singapore branch already adopted the Electronic Trading platform in November last year.
The Head of Global Markets Department at ICBC (Asia), Jimmy Jim, said: “ICBC (Asia) is the offshore RMB pricing centre of ICBC Group and one of the most active CNH market makers in Asia. Having been nominated by Hong Kong Monetary Authority as Primary Liquidity Provider, ICBC (Asia) has a mission to support the development of offshore CNH market.”
Chinese Yuan Liquidity Conditions Changing
From being an exotic product that is traded only via Non-Deliverable Futures (NDFs), the Chinese yuan is slowly transitioning into a currency that is traded easily. The commitment of China to allow further convertibility of the national currency could become a cornerstone for the global FX market.
Years in the making, the Chinese yuan market is becoming more prepared for increased trading activity. Currently, the renminbi is the 6th largest currency used for settling payments globally. In contrast, when it comes to trading on the foreign exchange market, the Chinese currency’s use is still small relative to the size of the economy of the country.
With increasing demand, the largest Chinese bank is taking a leadership role in supporting liquidity of the offshore Chinese yuan market. ICBC is one of the largest CNH market makers in the world.
The flagship trading platforms of Thomson Reuters, FXall and Electronic Trading are both available via FXT, the company’s flagship desktop platform.
After acquiring FXall in 2012, the company brought together both solutions into a single platform in 2015.
Commenting on the partnership between the largest Chinese bank and Thomson Reuters, Thomson Reuters’ Head of FX Market Development in Asia Pacific, Michael Go, said: “As the leading platform provider for offshore electronic CNH and RMB trading, Thomson Reuters sits at the junction of currencies, commerce and regulation globally.”