China bans pricing in offshore NDF market
The State Administration of Foreign Exchange (SAFE) issued orders on Thursday (October 26) suspending onshore banks from transacting in offshore USD/CNY NDFs. The move stops a common practice among onshore banks that had been matching onshore forward US dollar demand by buying US dollars through NDFs.
"The attraction of this was that it was not booked as a net-open position and could allow for onshore-offshore arbitrage," said Claudio Piron, Asia FX strategist at JP Morgan in Singapore
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