The trading volume on July 31st was CNY 665.6 mln (RUB 3.8 bln), the largest daily volume since the launch of yuan trading on Moscow Exchange in late 2010. Trades were made in all CNY/RUB instruments: spot trades totaled CNY 212.2 mln, and swap trades came to CNY 453.5 mln. A “long-term” swap with 1W maturity was traded for the first time. Twenty-five banks traded the currency.
The CNY/RUB trading volume for July was CNY 3.8 bln (RUB 21.5 bln), a monthly record. The average daily yuan trading volume in July was CNY 166 mln, also a record. The number of traders conducting operations in the currency in July increased to 80.
The increase in yuan liquidity was driven by significant reforms of Moscow Exchange’s FX Market in 2013. These include: partial pre-depositing of funds introduced, the use of yuan as collateral, tom instruments and swaps with maturities of up to 6M introduced, trading hours extended, and fees reduced. This brought conditions for trading yuan into line with trading of other major currency pairs on Moscow Exchange.
“Development of CNY/RUB instruments is one of the most important growth areas of for Moscow Exchange’s FX Market. Increased yuan turnover diversifies our FX Market and broadens the range of instruments and strategies available to members. It also facilitates the use of Russia and China”s national currencies in external economic activities. We expect to see additional growth in yuan liquidity, due in part to long-term instruments, to which we plan to add yuan futures on Moscow Exchange”s Derivatives Market,” said Moscow Exchange’s Money Market Managing Director Igor Marich.
According to Andrey Dorfman, senior trader at Bank of Moscow’s FX and interest instrument and derivatives department, CNY/RUB turnover will continue growing amidst increasing demand for Asian currencies from Russian market participants, efforts to move from the dollar to direct settlement, and the need to use the Exchange as an instrument to manage counterparty risk.