Emerging Markets Rates and Currencies Handbook

China (CNY - Onshore Renminbi) Citi in China Citi has been in China since 1902. Today, China is one of Citi’s most prioritized markets in the world. In 2007, Citi was amongst the first of the international banks to incorporate locally in China, under the local subsidiary known as Citibank (China) Co., Ltd. Citi China’s customer base spans multinational corporations, top-tier local corporations, state-owned enterprises, financial institutions, middle market enterprises and small and medium enterprises, as well as retail customers. With operations in 12 cities across China, Citi is a leading international bank in China. In addition to financial services, Citi is introducing its technical expertise to China through its centers of excellence, in the areas of technology and data processing. Market Overview The People’s Bank of China (PBOC), China’s central bank, maintains the currency in a managed float with reference to a basket of currencies. The renminbi (RMB) is deliverable and partially convertible. PBOC announces the FX fixing rate every morning at 9.15 Beijing time, and the interbank market is only allowed to trade within +/- 2% of the fixing rate for onshore RMB(CNY) vs USD. Onshore RMB (CNY) has undergone a rapidly changing process for pricing. In Aug 2015, PBOC changed the fixing price mechanism, indicating that the fixing price shall consider the previous closing at 4:30pm while also considering the RMB index levels; In Dec 2016, the currency basket for CFETS RMB Indices expanded from 11 to 24 currency components. CNY 7-Day Repo is the most frequently used benchmark rate for onshore interest rate swap, apart from CNY 7-Day Repo, LPR interest rate swap and Shibor interest rate swap are also actively traded. 9