Offshore Renminbi Stability
It also reported a steady rise in Dim Sum bond issuance and higher Renminbi use in trade settlement. The bank associated these factors with the RGI’s stable performance. Standard Chartered attributed support for wider Renminbi use to efforts by mainland China and Hong Kong authorities under the 15th Five-Year Plan. It also pointed to a widening range of Renminbi assets as part of the backdrop. The stable performance of the offshore Renminbi (CNH) suggests that implied volatility should remain low in the coming weeks. We are seeing CNH implied volatility trading near 18-month lows, a sharp contrast to the elevated levels seen during the US-China tariff uncertainty in mid-2025. This low-volatility environment makes selling options, rather than buying them, an attractive strategy for generating income. Given the steady upward trend expected for the CNH, we see an opportunity in selling out-of-the-money puts on the USD/CNH pair. This strategy profits from both time decay and the currency’s stability or gradual appreciation. The ongoing policy support from the 15th Five-Year Plan provides a solid foundation for this view.Rising Renminbi Global Usage
This outlook is reinforced by recent data showing increased global usage of the currency. SWIFT data released last week showed the Renminbi’s share of global payments reached a new high of 4.8% in February, up from 4.5% at the end of last year. This confirms the renewed appetite for Renminbi assets that we’ve been tracking since the trade truce was reached in November 2025. We also note that Dim Sum bond issuance has been strong, with over RMB 100 billion issued in the first two months of this year alone. This signals broad investor confidence that extends beyond just the currency markets. This continued demand for Renminbi-denominated assets should provide a supportive floor for the CNH. Create your live VT Markets account and start trading now.
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