China corporates drive up onshore OTC interest rate trading
But speculation and not hedging could be behind the increase
Trading volumes of interest rate swaps (IRSs) have hit record highs in China this year with a significant portion of the increased volumes coming from onshore corporates looking to position themselves to benefit from expected additional rate cuts.
The People's Bank of China (PBoC) has cut both interest rates and the reserve requirement ratio – the amount of depositor balances banks must have available as cash – twice this year, as the central bank looks to reduce corporates' funding costs and
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