HKEX Announces Launch of Mini USD/CNH Futures in H1 2021

Hong Kong Exchanges and Clearing Limited (HKEX) today announced the launch of a cash-settled Mini USD/CNH (US dollar/Offshore Renminbi, or RMB) Futures contract -- a smaller-sized contract to complement the popular USD/CNH derivatives products, further diversifying HKEX's suite of currency derivatives to support the risk-management needs of global investors.

"HKEX has been leading Hong Kong's development as a global fixed-income and currency hub, and these currency derivatives products serve to underscore our commitment to further enhancing the breadth and attractiveness of our markets," said HKEX Interim Chief Executive Calvin Tai.

"The new Mini USD/CNH Futures will expand HKEX's Renminbi derivatives product suite, providing investors with an enhanced range of risk-management tools. Not only will this help them optimise their capital efficiency, but it will further support the continued internationalisation of the Renminbi," added Mr Tai.

HKEX plans to launch the new Mini USD/CNH Futures in the first half of 2021, subject to market readiness.

The Mini USD/CNH Futures contract responds to demand from market participants, particularly medium-sized corporates and individuals, for cash-settled and smaller-sized contracts, helping investors to hedge the RMBcurrency risk of theirpositions in different assets, such as equities and commodities.

The contract size of Mini USD/CNH Futures is US$20,000, or one-fifth of the size of existing deliverable USD/CNH Futures offered by HKEX, allowing more precise hedging for market participants. The minimum investment will be lower than that of the existing deliverable USD/CNH Futures, as the required initial margin amount per contract will be reduced to around RMB2,000, subject to periodic adjustments.

HKEX launched the world's first deliverable USD/CNH Futures contract in September 2012, and has seen strong growth in its turnover over the years, tracking the rising demand for RMB products. This contract is now one of the most actively-traded RMB futures contracts in the world, with open interest of 28,223 contracts (ie US$2.8 billion in notional amount) at the end of 2020, up 22 per cent from 2019.

HKEX has in recent years diversified its currency derivatives product offering with futures contracts on CNH currency pairs against the Japanese yen, Euro, and Australian dollar, USD-denominated CNH/USD Futures, USD/CNH Options, as well as futures on the Indian rupee against the USD and Offshore RMB.