Is RMB onshore or offshore?

In the foreign exchange market, however, there are two types of Renminbi: onshore and offshore: CNY (onshore – RMB traded within Mainland China) CNH (offshore – RMB traded outside of Mainland China)

What is the difference between onshore and offshore currency?

You can buy and sell currencies at different prices depending on where you are, i.e. which market you are trading the currencies – ‘onshore ‘ or ‘offshore’. ‘Onshore’ currencies simply mean buying the currencies locally, whereas ‘offshore’ currencies mean buying the currencies outside the national boundaries.

What is China Offshore Bond?

Offshore bonds are bonds that are primarily traded in Hong Kong and denominated in offshore Chinese RMB (CNH). These are commonly called “dim sum” bonds, and they represent a USD 52billion market.

What is offshore RMB market?

In this context, an offshore market simply refers to a pool of readily available RMB outside of Mainland Chinese borders. The US dollar, for instance, is widely available outside of its home country, which has been a natural function of its dominance in the post-WWII era.

Is the offshore renminbi the same as the onshore RMB?

The notice about cross-border renminbi transactions is a reminder of an existing reality: that the onshore and offshore renminbi markets are still very much separate entities. If you’re investing in the offshore renminbi market, that’s what you’ll get – CNH, as the offshore renminbi is known.

Is there a correlation between offshore and onshore bonds in China?

Contradictory to a lot of investors’ perception, China onshore (RMB) and offshore bonds (USD) markets have negative correlation (Figure 1). There are multiple structural reasons behind this:

Are there any offshore RMB denominated corporate bonds?

As beyondbrics has previously reported, a large share of offshore renminbi assets such as dim sum bonds (corporate bonds denominated in renmibi) have more appeal for their currency play than for their yields.

Where are Offshore bonds domiciled in the UK?

Being regulated by the UK watchdog, investors should be somewhat re-assured that their ‘offshore’ investments are under the watchful eye of the FCA. Offshore bonds are domiciled outside of the UK, typically in places like the Isle of Man or Jersey.