Renminbi as collateral

Since July 2015, LME Clear members have been able to use Offshore Renminbi (CNH) as eligible cash collateral to cover their margin requirements.

One of the International Monetary Fund’s (IMF) ‘main world currencies’, the renminbi recently became the first emerging market currency to be included in the IMF’s basket of SDR (Special Drawing Rights) currencies, underlining the rise in importance of the currency.

The renminbi is seeing increasing international adoption and is one of the top five global payment currencies. The renminbi service is an important addition to the LME Clear collateral suite, especially since more Chinese firms are now trading on the LME.

From 27 March 2017, LME Clear has reduced the notice period that members must provide before placing or withdrawing renminbi to 2 Business Days in each instance - this was previously 3 day lodgement, 5 day withdrawal - thereby helping to increase efficiencies in liquidity management.

We work continuously with our members to help them take advantage of the opportunities arising from the renminbi’s internationalisation, and to connect market participants from Mainland China and the rest of the world.

The LME currently has six Chinese-owned members. Chinese-owned BOCI Global Commodities – the first Chinese firm to become an LME Clear member - was the first to submit CNH as collateral.