China introduces centralised clearing for RMB interest rate swaps

Centralised clearing of RMB interest rate swaps has commenced this month in China, according to the country’s central bank, the People’s Bank of China.

Centralised clearing of RMB interest rate swaps has commenced this month in China, according to the country’s central bank, the People’s Bank of China.

The launch took place at the Shanghai Clearing House this month, amid hopes from commercial banks and other financial institutions in attendance that the development will improve China’s financial market infrastructure.  

The decision to introduce interest rate clearing had been taken earlier by a plenary session of China’s ruling Communist Party Central Committee.

The intention is that this innovation will encourage development of a more comprehensive framework for the centralised clearing business of OTC financial derivatives, and help more broadly the operations of China’s OTC derivative market, as well as abet Shanghai’s aspirations to become a regional financial hub.

 

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