Standard Chartered today announced that their Renminbi Globalisation Index*, or the RGI, reached 1,050 in June, up 4.8% from the previous month and up 65% year-on-year, withstanding macro and market uncertainties. Standard Chartered believe that the rise was mainly driven by a rise in CNH FX turnover, offsetting a mild reduction in Renminbi-denominated cross-border payments through Hong Kong and Singapore on the back of falling Chinese exports in June.

Primary issuance of offshore Renminbi bond market in July slid to the lowest in the year as risk appetite remained weak on concerns over China's slowing economic growth and likely stalling currency appreciation. Stabilising market condition is probably leading to re-opening of the primary market for high-quality issuers.

Standard Chartered believe that the index remains on track to reach at least 1,200 by the end of the year, but the pace of the increase in the second half is likely to ease from the first half, or at least until China emerges from its recent growth soft patch and the Renminbi resuming its appreciation trend.

New policy package next month
Over the next month, all eyes will be on the announcement of a new policy package that would define the brand new Free Trade Zone initiative in Shanghai recently approved by the State Council. The plan is likely to include experimentation on freer cross-border commodity and capital flows, as well as greater Renminbi convertibility by corporates operating in the zone. Shanghai Free Trade Zone will be a positive to all CNH centres.

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*Standard Chartered launched the RGI in November 2012. The Index covers the top three markets in offshore RMB business: Hong Kong, London, and Singapore. It measures business growth in four key areas: deposits (denoting store of wealth), Dim Sum bonds and Certificate of Deposits (as vehicles for capital raising), trade settlement and other international payments (unit of international commerce) and foreign exchange (unit of exchange).