On 1 December 2015, the IMF announced that RMB will be included in the basket of currencies comprising IMF’s Special Drawing Rights.
This represents the recognition of RMB at the highest level of global finance and an acknowledgement of the efforts of the PRC authorities in the past decade to broaden the onshore and offshore access to the PRC capital markets. We expect the IMF’s announcement will further open China’s capital markets to the international market by increasing foreign investors’ appetite to invest in, and hold, RMB denominated assets, and will encourage a wider use of RMB in cross-border transactions. We also expect that the IMF’s announcement will encourage the PRC authorities to introduce further initiatives to facilitate the flow of cross-border RMB.
We therefore take this opportunity to recap on the existing access programmes in the cross-border RMB market and, based on these existing programmes, predict what we can expect next.