Risk recycling issues stall China forex option market
Onshore corporates yet to take advantage of increased hedging options
A significant relaxation in the rules around Chinese corporates' use of foreign exchange options last year has not driven a material increase in volumes as limited risk recycling opportunities for dealers mean pricing is still high, according to Chris Allington, Singapore-based head of global FX for Standard Chartered.
In August China's State Administration of Foreign Exchange allowed corporates to sell options; previously they were only allowed to use forwards, or to buy options in order to
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