China Foreign Exchange Trade System: In August, the offshore (CNH) RMB appreciated against the US dollar, and the onshore (CNY) RMB also appreciated against the US dollar.

On September 9, the China Foreign Exchange Trading System published a report indicating that in August, the offshore (CNH) Renminbi appreciated against the US dollar, while the onshore (CNY) Renminbi also appreciated against the US dollar; the daily average price difference (absolute value of CNY-CNH) was 32 basis points (BP), a decrease of 6 BP from the previous month; the CFETS Renminbi exchange rate index and the Renminbi exchange rate indices referencing the BIS and SDR currency baskets respectively declined by 0.31%, 0.57%, and 0.22% compared to the end of last month. The issuance of offshore Renminbi bonds decreased compared to the previous month. The CNH HIBOR overnight, 7-day, 3-month, and 1-year rates increased by 24 BP, 2 BP, and 4 BP respectively, while the 1-year rate decreased by 3 BP. Original text as follows: Overview of the Offshore Renminbi Market in August 2026 Summary In August, the offshore (CNH) Renminbi appreciated against the US dollar, and the onshore (CNY) Renminbi also appreciated against the US dollar; the daily average price difference (absolute value of CNY-CNH) was 32 BP, 6 BP lower than the previous month; the CFETS Renminbi exchange rate index and the Renminbi exchange rate indices referencing the BIS and SDR currency baskets respectively declined by 0.31%, 0.57%, and 0.22% compared to the end of last month. The issuance of offshore Renminbi bonds decreased compared to the previous month. The CNH HIBOR overnight, 7-day, 3-month, and 1-year rates increased by 24 BP, 2 BP, and 4 BP respectively, while the 1-year rate decreased by 3 BP. 1. Offshore Renminbi Deposits in Hong Kong, Macau, and Taiwan In July 2026, the scale of offshore Renminbi deposits in Hong Kong and Taiwan increased compared to the previous month. Among them, the scale of Renminbi deposits in Hong Kong was 1,125.36 billion Yuan, an increase of 2.9% compared to the previous month, and in Taiwan, it was 106.54 billion Yuan, an increase of 1.2% compared to the previous month. The amount of cross-border trade settlement in Hong Kong was 1,383.72 billion Yuan, an increase of 8.3% compared to the previous month. In July 2026, the scale of Renminbi deposits in Macau was 70.66 billion Macau Patacas (equivalent to 59.01 billion Yuan), an increase of 4.8% compared to the previous month (an increase of 3.9% when calculated in Renminbi). 2. Offshore Renminbi Foreign Exchange Market In August, the offshore (CNH) Renminbi appreciated against the US dollar, and the onshore (CNY) Renminbi also appreciated against the US dollar. Spot Market: On August 31, the CNH exchange rate closed at 6.7180 against the US dollar, appreciating by 0.52% from the end of the previous month; the CNY exchange rate closed at 6.7198 against the US dollar, appreciating by 0.41% from the end of the previous month; the daily average price difference (absolute value of CNY-CNH) was 32 BP, down 6 BP from the previous month. The CFETS Renminbi exchange rate index and the indices referencing the BIS and SDR currency baskets were 101.87, 109.15, and 96.67, decreasing by 0.31%, 0.57%, and 0.22% respectively from the end of the previous month. Exchange Rate Derivatives Market: In terms of pricing, the CNH 1-year swap points closed at -1824 BP, an increase of 6 BP from the end of the previous month; the CNY 1-year swap points closed at -1823 BP, a decrease of 21 BP from the end of the previous month. The absolute value of the daily average swap points (CNH-CNY) was 11 BP, down 5 BP from the previous month. In terms of trading volume, in August 2026, the trading volume of the Hong Kong Exchange USD/CNH futures standard contract was 1,373,800 contracts, down 5.7% from the previous month, with open interest at month-end at 32,100 contracts, an increase of 7.3%. The trading volume of the Hong Kong Exchange USD/CNH options contracts was 25 contracts, an increase of 2400.0% from the previous month, with open interest at month-end at 213 contracts, an increase of 12.7%. In July 2026, the trading volume of the Singapore Exchange USD/CNH futures standard contract was 4,155,000 contracts, down 16.7% from the previous month, with open interest at month-end at 214,100 contracts, an increase of 6.6%. The trading volume of the Singapore Exchange USD/CNH options contracts was 5,032 contracts, down 53.9% from the previous month, with open interest at month-end at 10,568 contracts, a decrease of 3.9%. 3. Offshore Renminbi Bond Market In August, the offshore Renminbi bond market issued 100 bonds, a decrease of 13 bonds from the previous month, with a total issuance amount of 109.162 billion Yuan, a decrease of 29.0% from the previous month. 4. Offshore Renminbi Money Market At the end of August, the overnight, 7-day, 3-month, and 1-year CNH HIBOR rates were 1.3815%, 1.4176%, 1.6270%, and 1.6694%, respectively, an increase of 24 BP, 2 BP, and 4 BP, and a decrease of 3 BP compared to the end of the previous month. The average interest rate differential between offshore and onshore lending rates for overnight, 7-day, 3-month, and 1-year was -1 BP, 2 BP, 18 BP, and 21 BP, respectively, with the average values from the previous month remaining virtually unchanged, down 3 BP, unchanged, and down 2 BP. At the end of August, the implied yields for CNH forward contracts for 7-day, 3-month, and 1-year were 1.1448%, 1.3116%, and 1.3626%, respectively, increasing by 1 BP, 8 BP, and 6 BP compared to the end of the previous month. 5. Dynamics of Foreign Institutions in the Domestic Interbank Market As of the end of August, the total number of foreign institutions participating in the domestic interbank foreign exchange market reached 257, an increase of 2 from the previous month. In the foreign exchange spot market, there were 29 offshore clearing banks (unchanged from the previous month), 77 offshore participating banks (an increase of 1 from the previous month), and 70 offshore central bank-like institutions (unchanged from the previous month). The total number of foreign institutions participating in the domestic interbank local currency market and their products was 5,872 (units), a decrease of 4 from the end of the previous month. This included 181 central bank-like institutions, 504 commercial banks, 251 non-bank financial institutions, 44 medium- to long-term institutional investors, and 4,892 investment products issued by financial institutions, with the numbers remaining unchanged, an increase of 3, an increase of 1, unchanged, and a decrease of 8 from the end of the previous month, respectively. In August, in the domestic interbank foreign exchange market, the total trading volume of foreign institutions was 2,129.151 billion Yuan, a decrease of 27.8% month-on-month. Among them, the foreign exchange spot trading volume was 131.260 billion Yuan, a decrease of 28.5% month-on-month; the foreign exchange derivatives trading volume was 634.001 billion Yuan, a decrease of 29.3% month-on-month; the foreign currency lending and repurchase trading volume was 1,363.889 billion Yuan, a decrease of 27.1% month-on-month. In the domestic interbank money market, the total trading volume of foreign institutions was 1,308.520 billion Yuan, a decrease of 9.7% month-on-month. In the domestic interbank bond market, the total trading volume of foreign institutions was 1,406.756 billion Yuan, a decrease of 10.5% month-on-month. Among them, the transaction amount for offshore central bank-like institutions was 221.807 billion Yuan, a decrease of 6.9% month-on-month; the transaction amount for offshore commercial banks was 974.671 billion Yuan, a decrease of 8.4% month-on-month; the transaction amount for offshore non-bank financial institutions (including offshore medium- to long-term institutional investors) was 50.434 billion Yuan, a decrease of 46.4% month-on-month; the transaction amount for investment products issued by offshore financial institutions was 159.843 billion Yuan, a decrease of 8.6% month-on-month. This article is excerpted from the WeChat official account of the China Money Market, edited by GMTEight: Chen Wenfang.