Corporates Can Better Manage Risk Between the US Dollar and All Three Traded Chinese RMB Currencies, Using Reval

With the pace of RMB internationalization escalating since the de-peg of China’s currency from the US dollar last year, more multinationals are requiring technology solutions that can help them manage the risk between the two currencies, reports Reval, the leading global provider of financial risk management Software-as-a-Service (SaaS) solutions, which now supports all three traded RMB currencies – USD CNY (non-deliverable), USD CNH (offshore deliverable) and USD CNY (onshore deliverable).

“Our clients typically rely on Reval to provide all market data for their pricing, accounting and risk management needs,” says Tony Singleton, Reval Managing Director, APAC. “Our ability to roll out these new currencies and market data seamlessly into our single-version platform allows those clients that actively trade with China or that have Chinese operations to take advantage of this greater flexibility in RMB settlement.”

Previously, most companies outside and within China had been excluded from settling in RMB, with all trades being settled net of USD in the non-deliverable forward market. Now, over 60,000 mainland Chinese exporters can participate in cross border RMB settlement within any non-Chinese corporate, regardless of where they are domiciled. In addition, two new markets have been developed for cross border transactions and hedging – the onshore deliverable market (currency = CNY) and the offshore deliverable market (currency = CNH).

“Settlement in the local currency is clearly beneficial since local expenses and revenue is typically denominated in RMB, which allows for easier cash-flow management,” explains Blaik Wilson, Vice Chairman of the Hedge Accounting Technical Task Force at Reval.

“Foreign corporations can now also accumulate RMB offshore, allowing treasurers to actively manage these funds far more effectively. Companies can buy from Chinese suppliers in local currency, shortening the purchasing or sales lifecycle and enabling suppliers quicker access to tax rebates from the Chinese authorities. This is likely to open up the supplier base to more providers, given many had limited access to foreign currency”

For more information on how to manage risk between the USD and RMB using Reval, please contact info@reval.com. Find additional information on Reval by visiting www.reval.com.

About Reval

Reval provides an award-winning Web-based platform that automates corporate financial risk management for a wide range of interest rate, foreign exchange, commodity and credit derivatives. The world’s leading corporations and financial institutions use this SOX-compliant Software-as-a-Service to support and execute hedging strategies from exposure capture through performance measurement and to comply with international and domestic accounting standards, including IAS 39, IFRS 7, FAS 133 and FAS 15. Reval was founded in 1999 and is headquartered in New York, with regional centers based in Philadelphia, Chicago, San Francisco, Toronto, London, Frankfurt, Graz, Sydney, Hong Kong, and Gurgaon.

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