LCH adds five currencies to non-deliverable interest rate swaps

Bank of America Merrill Lynch, JP Morgan and Standard Chartered are among the first financial institutions to clear the new derivatives at LCH. 

London-based clearinghouse LCH has expanded its non-deliverable interest rate swaps products with five additional currencies.

The additional swaps being cleared by LCH and now available to clearing members and clients include Brazilian Real, Chilean Peso, Colombian Peso, Taiwan Dollar, and Thai Baht-denominated non-deliverable interest rate swaps.

Bank of America Merrill Lynch, JP Morgan and Standard Chartered are among the first financial institutions to clear the new derivatives, which build on LCH’s existing non-deliverable interest rate swaps for Chinese Yuan, Indian Rupee and Korean Won, which launched in April last year.

Standard Chartered’s global head of rates trading, Bruno Lettich, commented that the addition is an important development for the market and extends LCH’s global liquidity pool significantly.

“We are delighted to be among the first members to clear these derivatives at LCH as we continually look to expand the risk management benefits that we provide to our clients,” he said. “This move by LCH to expand the Asian product offering and the inclusion of Latam currencies, extends the significant margin and capital efficiency benefits of LCH’s global liquidity pool.”

LCH said in a statement that the product extension was the result of client demand, particularly among its membership and their clients in Asia-Pacific and Latin America. LCH SwapClear now clears derivatives for 26 currencies. As of November, LCH SwapClear’s cleared notional volumes year to date totalled just over $1 quadrillion, while year-to-date notional compressed reached $700 trillion, a record for the clearinghouse.

“We’re delighted to be expanding our non-deliverable swaps offering to include these currencies. Our focus continues to be on providing maximum capital and margin efficiencies for the market, and this latest extension is another example of LCH partnering with our customers to extend our cleared product set,” LCH’s global head of product for rates, Cameron Goh, concluded.

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