Foreign commodity exporters to China seek RMB settlement after US fiscal cliff fears
Foreign commodity exporters into China are increasingly requesting physical trade settlement in offshore renminbi (CNH) following fears that the value of dollar holdings will be hit by the US fiscal cliff in the coming months, according to market participants.
The standard transaction model is for a Chinese end-user to issue a three-month or six-month letter of credit (LC) in either USD or CNH. Whereas previously government incentives led to Chinese firms asking for a proportion of their
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