China opens up onshore swap market but hurdles remain
Foreign investors can now hedge CNY bonds but dealers expect limited uptake
Despite China recently giving the go-ahead for foreign investors to use bond lending and interest rate derivatives to hedge exposures from the opening of the domestic interbank bond market, demand will remain muted because of foreign exchange risk and lack of clarity on documentation and clearing, say dealers.
At the end of May, the People's Bank of China (PBoC) and the State Administration of Foreign Exchange (Safe) published rules, along with a frequently-asked-questions document, outlining
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