Yuan-Ruble Trading Set New Records in July at Moscow Exchange FX Market
- Internal reforms at the venue, increased demand from Russian firms, efforts to move from the U.S Dollar to direct settlement and the need to manage counterparty risk are credited with driving CNY/RUB volumes
The Moscow Exchange Group, Russia’s main trading venue, announced that new record volumes have been set in the trading of the Chinese yuan/Russian ruble (CNY/RUB) currency pair on its FX Market. As the U.S and EU set to expand the economic sanctions regime placed on the Russian government due to the events in Ukraine, the nation is forced to look to the Chinese market for business opportunities and the importance of the yuan rises in tandem.
The CNY/RUB trading volume at the Moscow Exchange for July 2014 was CNY 3.8 bln (RUB 21.5 bln), a new monthly record. The average daily yuan trading volume in July was CNY 166 mln, also a record. The number of traders conducting operations in the currency in July increased to eighty. The trading volume on July 31 was CNY 665.6 mln (RUB 3.8 bln), the largest daily volume since the launch of yuan trading on Moscow's Exchange in late 2010. Trades were made in all CNY/RUB instruments: spot trades totalled CNY 212.2 mln, and swap trades came to CNY 453.5 mln. A "long-term" swap with one week maturity was traded for the first time. Twenty-five banks traded the currency during that one day, according to the Russian venue.
"Development of CNY/RUB instruments is one of the most important growth areas for Moscow Exchange's FX Market. Increased yuan turnover diversifies our FX Market and broadens the range of instruments and strategies available to members. It also facilitates the use of Russia and China's national currencies in external economic activities. We expect to see additional growth in yuan Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, due in part to long-term instruments, to which we plan to add yuan futures on Moscow Exchange's Derivatives Market," said Moscow Exchange's Money Market Managing Director, Igor Marich.
The increase in yuan liquidity was driven by significant reforms of its FX Market in 2013, the Moscow Exchange stated in the announcement. These reforms include: partial pre-depositing of funds introduced, the use of yuan as collateral, tom instruments and Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term with maturities of up to six months introduced, trading hours extended, and fees reduced. This brought conditions for trading yuan into line with trading of other major currency pairs on the Moscow Exchange.
Beyond its internal reforms, the analysis at the venue acknowledges the part played by larger economic trends in driving yuan trading volumes to new all-time highs. Andrey Dorfman, senior trader at Bank of Moscow's FX and interest instrument and derivatives department, explained that CNY/RUB turnover will continue to grow because of the increasing demand for Asian currencies from Russian market participants, efforts to move from the dollar to direct settlement, and the need to use the Exchange as an instrument to manage counterparty risk.
The Moscow Exchange Group, Russia’s main trading venue, announced that new record volumes have been set in the trading of the Chinese yuan/Russian ruble (CNY/RUB) currency pair on its FX Market. As the U.S and EU set to expand the economic sanctions regime placed on the Russian government due to the events in Ukraine, the nation is forced to look to the Chinese market for business opportunities and the importance of the yuan rises in tandem.
The CNY/RUB trading volume at the Moscow Exchange for July 2014 was CNY 3.8 bln (RUB 21.5 bln), a new monthly record. The average daily yuan trading volume in July was CNY 166 mln, also a record. The number of traders conducting operations in the currency in July increased to eighty. The trading volume on July 31 was CNY 665.6 mln (RUB 3.8 bln), the largest daily volume since the launch of yuan trading on Moscow's Exchange in late 2010. Trades were made in all CNY/RUB instruments: spot trades totalled CNY 212.2 mln, and swap trades came to CNY 453.5 mln. A "long-term" swap with one week maturity was traded for the first time. Twenty-five banks traded the currency during that one day, according to the Russian venue.
"Development of CNY/RUB instruments is one of the most important growth areas for Moscow Exchange's FX Market. Increased yuan turnover diversifies our FX Market and broadens the range of instruments and strategies available to members. It also facilitates the use of Russia and China's national currencies in external economic activities. We expect to see additional growth in yuan Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, due in part to long-term instruments, to which we plan to add yuan futures on Moscow Exchange's Derivatives Market," said Moscow Exchange's Money Market Managing Director, Igor Marich.
The increase in yuan liquidity was driven by significant reforms of its FX Market in 2013, the Moscow Exchange stated in the announcement. These reforms include: partial pre-depositing of funds introduced, the use of yuan as collateral, tom instruments and Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term with maturities of up to six months introduced, trading hours extended, and fees reduced. This brought conditions for trading yuan into line with trading of other major currency pairs on the Moscow Exchange.
Beyond its internal reforms, the analysis at the venue acknowledges the part played by larger economic trends in driving yuan trading volumes to new all-time highs. Andrey Dorfman, senior trader at Bank of Moscow's FX and interest instrument and derivatives department, explained that CNY/RUB turnover will continue to grow because of the increasing demand for Asian currencies from Russian market participants, efforts to move from the dollar to direct settlement, and the need to use the Exchange as an instrument to manage counterparty risk.