Roger Rutherford The leading derivatives exchange, CME Group, has announced the launch of a new foreign exchange futures contract using the Chinese Yuan or Renminbi.
In a statement, CME said the move was prompted by the growing demand for yuan-denominated products across the globe. “These innovative new futures contracts will be quoted in interbank (European) terms, reflecting the number of CNY per US dollar. These futures products are aligned with the OTC market convention for non-deliverable forwards while providing the benefits of counterparty risk mitigation from exchange-traded derivatives,” the company said.
Roger Rutherford, Managing Director FX Products for CME Group commented: "Given the Yuan's movement toward greater convertibility and the growing offshore trade of the currency in Hong Kong, CME Group has developed these innovative new (CNY) futures contracts to further enable our customers to more effectively manage their currency risk with the counterparty risk mitigation benefits of an exchange traded product.”
According to Rutherford, the launch of Yuan contracts demonstrates the exchange’s continued commitment to its global customer base by creating new products that are relevant to both mature and emerging markets. He added that these new contracts follow other emerging markets products such as Russian Ruble and Brazilian Real, which have seen year to date growth of 350% and 450% respectively.
“These significant increases in both volumes and open interest reflect increasing demand for credit risk mitigation in emerging markets products, and we believe that our new Yuan futures products provide these same benefits for customers managing their Yuan currency risk" he said.