Some Key Points: The Renminbi & China Commercial Paper Market (KraneShares)
Jeffrey Qi, the portfolio manager for the KraneShares E Fund China Commercial Paper ETF (NYSE: KCNY), recently summed up the most frequently asked questions they receive about the Renminbi and China’s commercial paper market with the following points about the Chinese currency being worth reiterating:
People are talking more and more about RMB internationalization – the idea gained momentum in late 2011 when the Chinese government started the Renminbi Qualified Foreign Institutional Investor (RQFII) project. This program allows asset managers with quotas to raise funds in Hong Kong and channel such funds directly into Mainland securities in RMB. With the advent of the RQFII system international investors are now buying and selling funds in RMB with significantly fewer restrictions. And as the Chinese government is opening up its capital market, I believe they will continue to take steps to internationalize the RMB.
The RMB has tended to appreciate against USD because China is still the fastest growing major economy. For the past 10 years the currency has generally appreciated though there have been brief times of depreciation. During times of financial crisis, the currency will peg to USD, which is the case in the 2008 crisis. With more than $4 trillion USD foreign exchange reserve, China has the capability to keep the currency stable.
To read the whole article, KCNY FAQ with Guangdong (Jeffrey) Qi from E Fund Management, go to the website of KraneShares.
- China’s Renminbi is Rapidly Displacing the US Dollar as a Trading Currency (FT)
- Renminbi’s Share of Global Payments Falls (The Asset)
- Five Misconceptions About China’s Stock Markets (KraneShares)
- China’s $246B Foreign M&A Buying Spree Is Slowing (Bloomberg)
- Nikko AM’s Sartori: Best Buying Opportunities in Asia in My Career (AFR)
- Macro Tailwinds That Could Propel China’s Internet Sector (KraneShares)
- Korea & Taiwan Use Renminbi for Majority of Payments with China & Hong Kong (The Asset)
- What’s Really Driving China’s Currency Stability (KraneShares)
- Why a Financial Crisis is NOT Brewing in China (Institutional Investor)
- Podcast: A Beginner’s Guide to Investing in China (KraneShares)