RMB fall forces Chinese corporates to rethink hedges

For years, Chinese corporates assumed the renminbi would continue to appreciate, but following a surprise devaluation in August, many are now finding hedging a challenging experience

people-s-bank-of-china-yuan-notes-2015-compressed
Unexpected: August's 4% devaluation of the renminbi

For years, corporate treasurers in China had it easy. The renminbi rate, controlled by the central bank, was either pegged or appreciated slowly against the dollar, making foreign exchange management a safe and predictable process – if indeed they bothered at all.

So, when the People's Bank of China (PBoC) unexpectedly devalued the onshore renminbi by 4% against the US dollar over two days in August, many treasurers were caught on the hop. The worst affected were unhedged importers and those

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here