RMB globalization index at three-year low

Globalization of the renminbi – a key long-term goal for Beijing – is at its lowest point in three years as offshore dealing in the Chinese currency continues to shrink, the Financial Times reports. Standard Chartered’s analysts track offshore activity involving the currency, and their measure fell in February to its weakest point since March 2014. The 6.4% fall in the bank’s Renminbi Globalization Index was also the largest monthly drop since it began compiling the index. The fall comes as China has worked to stabilize its currency since unexpected volatility in January 2016 triggered global market turmoil. This year, both the offshore and onshore rates have traded in relatively tight ranges, which dealers believe has been engineered by the People’s Bank of China. Kelvin Lau, strategist at Standard Chartered, said the latest drop “adds conviction to our longstanding view that renminbi stability comes at the expense of renminbi internationalization.”