Deutsche Bank becomes the first bank to offer RMB FX via its worldwide branch network using Hong Kong as the central hub

The first bank to offer RMB foreign exchange derivatives. Source: shutterstock.com

The People’s Bank of China (PBOC) has given Deutsche Bank the green light to use the Hong Kong branch as the central hub to offer cross border Renminbi (RMB) spot and FX derivatives through any of the bank’s branches worldwide.

Winning this approval makes China FX and hedge solutions much more accessible for Deutsche Bank’s corporate clients, especially in Europe and the US. The first-of-its-kind solution allows clients of any Deutsche Bank branch in the world to trade onshore USD / CNY spot and hedging solutions.

The new branch-wide FX transaction model uses a centralized hub and spoke approach which Deutsche Bank pioneered and developed in consultation with PBOC. Hong Kong and Shanghai are RMB transaction hubs, connecting to other Deutsche Bank branches around the world.

The solution means Deutsche Bank clients can now access the onshore Chinese Yuan (otherwise known as Renminbi) rate in addition to offshore rates (known as CNH) for RMB FX conversion. The benefit to clients is it provides the potential to lower RMB FX transaction costs, as well as not having to set up an offshore RMB account in Hong Kong or Shanghai.

The solution allows Deutsche Bank to serve clients who are both buying onshore RMB and repatriating currency out of China, provided the client has a real underlying transaction to support the FX transaction.

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