RMB Internationalization Update

Caroline Owen

Regional Head of RMB Solutions, Americas

Standard Chartered Bank

October 2013

RMB Internationalization Overview

The Standard Chartered

Renminbi Globalisation Index

RMB Trade Settlement

CNH Bond Proceeds

CNH IPO Proceeds

CNH Loan Proceeds

R-QFII

RMB Inflows

RMB Trade Settlement

RMB Dividends

Swap agreements with

central banks

RMB Outflows

RMB Cross-Border Lending

Cross-Border RMB Flow

Regulatory Reforms

CNH Deposits

The Standard Chartered

Renminbi Globalisation Index (RGI)

0

200

400

600

800

1,000

1,200

1,400

Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13

Index as of August 2013 = 1,148

HK + SG + LDNHK

HK

+ S

G +

LD

N +

TW

Support from Central Banks RMB bilateral currency swap agreements with 24 central banks totaling over CNY 2.5 trillion

Regulatory Developments

Cross-Border RMB Transaction

Simplification for Corporates

RMB Cross-Border Trade Settlement

RMB Cross-Border Lending

RMB Guarantees

CNH Bond Proceeds

0.31%0.29% 0.29%

0.25%

0.33%0.35%

0.34%

0.40%0.43%

0.45%

0.53%0.51%

0.42%

0.56% 0.57%

0.63%

0.59%

0.74%

0.69%

0.84%

0.87%0.87%0.84%

17 17 17

20

1716 16 16 16

1514 14

16

14 1413

1413 13 13

11 1112

0

5

10

15

20

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

0.9%

1.0%

Wo

rld

Paym

en

ts C

urr

en

cy R

an

kin

g

RM

B a

s %

of W

orl

d P

aym

en

t C

urr

en

cie

s

RMB Payment Growth

Source: SWIFT RMB Tracker September 2013.

RMB as a % of World Payment Currencies October 2011 through August 2013

RMB Cross-Border Lending

Onshore corporates can lend excess RMB to overseas borrowers

through onshore banks without having to seek PBOC approval.

Offshore RMB

Account

(Offshore Borrower)

RMB

Pool Header or

Single Account

RMB Special

Account

RMB

Cross-Border

Loan

RMB Loan

Payments

RMB Cross-Border Lending

Chinese Corporate Lender Offshore Borrower

Offshore RMB Benchmark Interest Rate

1.091.26

1.47

2.072.25

2.47

2.782.96

0.5

1.0

1.5

2.0

2.5

3.0

3.5

O/N 1W 2W 1M 2M 3M 6M 1Y

Fix

ing

Ra

te (%

)

Tenor

Source: TMA as of 25-Oct-13.

CNH HIBOR Curve

Growing Liquidity in Offshore Hubs

709

14099

5

0

100

200

300

400

500

600

700

800

HK

(Aug-13)

Singapore

(Jul-13)

Taiwan

(Sept-13)

London

(Dec-12)

CN

H D

ep

osit

Vo

lum

es (B

n)

CNH Deposit Base in Offshore Hubs

RMB Appreciation Continues

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

6.00

6.05

6.10

6.15

6.20

6.25

6.30

6.35

6.40

6.45

% P

rem

ium

Bid

Rate

s

USD-CNY (Onshore RMB) USD-CNH (Offshore RMB)

CNH premium over CNY (%)

Historic Spot Rates (CNY, CNH)

Source: Bloomberg as at 25-Oct-13.

CNH Bond Market Update

10 12 1641

189

271282

0

50

100

150

200

250

300

2007 2008 2009 2010 2011 2012 2013

CDs/Money Market

Bonds

(CNH Bn)

CNH New Issue Volumes

Source: Standard Chartered as of 25-Oct-13

Shanghai Free Trade Zone

• FDI Regulation

• Tariffs

• Services

• Financial Services

• RMB

Convertibility

Source: The Economist

谢谢你!

Thank you!