The Hong Kong Monetary Authority has reported on the latest tender for People's Bank of China RMB bills, held on 20 December, which saw an issue of RMB5bn - equivalent to around $700m.
The tender was for six-month RBM bills with a maturity date of 21 June (or the closest coupon date), with the issue date set as 22 December 2023.
The HKMA reports that the application amount was RMB24.839bn against the issue of RMB5bn.
The average accepted coupon rate is 2.71%, while the range of highest/lowest accepted coupon rates was 2.8%/1.5%.
The allocation ratio at the highest accepted coupon rate was approximately 40.26%.
According to currency converter data from xe.com, China's currency is down about 2% versus the dollar over the past year to 20 December 2023, but is it up by around 0.7% over the past month. The latest US Fed FOMC meeting on 13 December suggested US rates could start to be cut in 2024, which would - other things being equal - usually see the dollar weaken against key trading partners' own currencies.
This would make the HK dollar more competitive because it is pegged to the US dollar. But the returns on RMB would be more uncertain.
