FXStreet (Guatemala) – Analysts at Nomura explained that the PBoC has relaxed (exact time not specified) the requirements for multinational corporations (MNCs) in China to participate in the cross-border RMB cash-pooling scheme.
Key Quotes:
“For CNH, the increase in capacity for corporates to remit RMB back into the onshore RMB cash pool will pressure USD/CNH lower given the earlier close to 1000pips premium of spot USD/CNH over spot onshore USD/CNY.
Looking ahead, this measure to allow increased remittance of RMB into onshore will help to reduce the gap between onshore spot USD/CNY and USD/CNH, but it may not necessarily result in a complete convergence. If concerns remain over near-term RMB depreciation, there may be limited incentive for corporates to maximize the new limit/remit beyond domestic RMB requirements.
Beyond the short-term convergence and gains in CNH, we maintain our view that RMB will depreciate against USD into year-end.”
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