CNH Offshore Chinese Yuan - does anyone have any experience with these?

A friend recently described Offshore RMB’s for me. Apparently, back in 2009/2010, some Chinese and HK banks put together a currency basket that tracked the performance of the CNY. Since CNY is not freely traded, this basket, known as CNH, would allow investors outside of China to participate.

A quick Google search for CNH Offshore RMB netted me this document: db.com/en/img/Deutsche_Bank … sation.pdf

Has anyone bought this instrument? Do you have a forecast for the RMB (CNY or CNH) for 2013??

You should be extremely careful buying synthetic financial products. In my personal view, it’s probably a stupid investment to make unless you are bringing a ton of money to the table or have bona fide hedging concerns (and again, bring money).

How much is a “ton of money”? I’m thinking a couple hundred large at a time and only as part of a diversification strategy

[quote=“Celeborn”]A friend recently described Offshore RMB’s for me. Apparently, back in 2009/2010, some Chinese and HK banks put together a currency basket that tracked the performance of the CNY. Since CNY is not freely traded, this basket, known as CNH, would allow investors outside of China to participate.

A quick Google search for CNH Offshore RMB netted me this document: db.com/en/img/Deutsche_Bank … sation.pdf

Has anyone bought this instrument? Do you have a forecast for the RMB (CNY or CNH) for 2013??[/quote]

You have the concept all wrong. It’s not a currency basket nor is it synthetic.

Cny is the onshore rate and cnh is the offshore rate. When you withdraw from a bank in china or Hong Kong, it’s the same rmb bills. The underlying asset is the chinese currency.

Why two different rates? Arbitrage is possible but not efficient.
Offshore Personal fx is only 20k rmb a day at cnh rate. Business account can fx unlimited.

You can move 80k a day between offshore to onshore. If you physically carry the money, you can only carry 10k per trip.

Cny interest rates are much higher but they sit in china.
Cnh account can be opened in hk,tw,Singapore,London

You can freely transfer cnh outside of china. Like I have moved cnh from hk to tw and converted the cnh to twd. Getting cny out if not as easy if you didn’t set it up properly.

With cny in china I can get 4.75 tax free annual interest on my money on a 5 year term deposit.