The Evolution of Offshore Renminbi Trading: 2016 to 2019

We study the evolution of offshore renminbi trading between 2016 and 2019. The geographical pattern of changes in offshore renminbi trading during this period is different from the one between 2013 and 2016. The pattern of changes in the 2016-2019 period, in addition to the previously reported convergence to the geographical trading pattern of all currencies, is affected by (geopolitical) disputes and trade intensity. Further, China-specific RQFII investment quota arrangements and offshore market’s equity market capitalization and level of financial development play a role in shaping the offshore RMB trading pattern.