Retail yuan non-deliverable forward contracts will be launched in Hong Kong early November, the Treasury Markets Forum of Hong Kong said in Hong Kong Monday.

To enable easy access, the retail yuan non-deliverable forward contracts will be offered at a minimum size of 10,000 US dollars. Initially the contracts will be offered in five tenors, ranging from one to 12 months, according to the forum.

"The launch of the retail yuan non-deliverable forward contracts is a clear example of how product innovation driven by coordinated efforts through the Treasury Markets Forum helps to cater for market needs," Treasury Markets Forum Chairman Choi Yiu-kwan said.

Following recent reforms to the yuan exchange-rate regime, there is an increasing demand from small and medium-sized enterprises and other retail customers for easily accessible financial instruments which can help them hedge their yuan exposures.

The forum formed a working group in August to explore the possibility of developing a yuan non-deliverable forward product to cater for this demand. The working group completed its work in mid-September and recommended its introduction, with standardization in both product features and documentation.

The Treasury Markets Forum of Hong Kong was set up in March 2004 to bring together the industry associations and professionalsin the treasury markets in Hong Kong, with a view to promoting co-operation and synergy to raise the professionalism of practitioners and the overall competitiveness of the treasury markets in Hong Kong.

Source: Xinhua