DBS Bank has completed a series of renminbi foreign currency derivatives transactions for corporate clients across China.
The bank is among the first to undertake such market innovations under new measures by China’s State Administration of Foreign Exchange (SAFE).
SAFE has announced a new framework effective from August 1 to allow banks to offer renminbi and foreign currency derivative products to corporate customers to enable them to hedge against potential currency volatility of their businesses.
On the first day of the new rulings, DBS China successfully executed a series of renminbi foreign currency derivatives, including European-style option transactions for clients based in eastern and southern China, as well as a renminbi cross currency swap for a client headquartered in northern China.
Jacky Tai, Managing Director and Head of Treasury and Markets at DBS China said, "As RMB internationalisation progresses, two-way renminbi fluctuation has become the new normal hence companies need effective tools to help lower overall currency risks. Many customers have expressed interest in new derivatives instruments since the announcement of the new measures.
"As a leading foreign exchange solutions provider in Asia, we are honoured to offer a wider range of trading strategies in support of our customers’ needs to hedge foreign exchange exposure."
Leveraging the bank’s experience and network in Asia’s two developed financial markets Singapore and Hong Kong, DBS China is developing more RMB/FX risk management solutions, to provide clients with greater flexibility to increase capital efficiency as well as to contribute to the development of China’s financial market.