Offshore Renminbi Trading: Findings from the 2013 BIS Triennial Central Bank Survey

Using foreign exchange transaction data reported in the Triennial Central Bank Survey by the Bank for International Settlements, we find that offshore renminbi (RMB) trading activity is affected by both the host economyi¯s characteristics and its link with China. For instance, the occurrence of offshore RMB trading is determined by the economyi¯s GDP, stage of financial development and free trade agreement with China. When an economy hosts offshore RMB trading, the trading volume is affected by the size of its foreign exchange market, equity market capitalisation, as well as the bilateral link with China through foreign direct investment flows.