(5 June 2013 – Hong Kong) Citi Hong Kong Markets has traded the first renminbi/United States (RMB/USD) dollar cross-currency swap transaction, which will take effect in early July.
The Cross-Currency Swap transaction used the three-month CNH (RMB) HIBOR as the pricing benchmark with Bank of China Hong Kong Ltd (BOCHK).
This landmark transaction marks the first trade of its kind in the market and is a new milestone in the offshore RMB business following the announcement by Treasury Markets Association (TMA) on 25 April to launch the CNH HIBOR fixing in June 2013.
The transaction, serving as a tool to hedge against interest rate risks, will be effective in early July with a 12-month contract period.
Interest rates for the two currencies are fixed every three months and are calculated based on the three-month CNH HIBOR and the three-month USD LIBOR respectively.
This deal underlines Citi’s strong RMB trading capabilities and continued focus in establishing our offshore RMB presence with innovative products and solutions.
In a statement the bank said: “as a pioneer in RMB internationalisation, Citi has been providing the full suite of RMB products and services leveraging our global network to provide robust solutions to our clients.”