Recently, the pace of interest rate cuts by the Federal Reserve has changed. Interest rates on US dollar financing are still high, and demand for cross-border RMB financing is strong. Hong Kong and overseas companies that are replacing US dollar loans for the purpose of reducing financial costs have objectively boosted the internationalization of the RMB. In response to research from a number of domestic and foreign banks, we learned that there is currently more demand for enterprises to choose RMB loans. Some are even replacing US dollar loans with RMB loans. On the one hand, they are considering reducing financing costs and financial burdens, and on the other hand, they are considering avoiding the risk of interest rate fluctuations and achieving exchange benefits. Furthermore, Chinese dollar bonds are too expensive to finance, and renminbi-denominated bonds issued in Hong Kong — Dim Sum Bonds — have also become a good alternative financing channel. If the Federal Reserve continues to cut interest rates in the future, the interest rate spread between the RMB and the US dollar may shrink or fluctuate, but there is still room for interest spreads, and there is also exchange gains and losses. Industry insiders said that with the rise of emerging global economies, monetary multipolarization to reduce dependence on the US dollar may become a long-term trend. Strong demand for RMB cross-border trade settlement, investment and financing, and foreign exchange risk management will accelerate the maturity of the cross-border RMB ecosystem and help internationalize the RMB.

Recently, the pace of interest rate cuts by the Federal Reserve has changed. Interest rates on US dollar financing are still high, and demand for cross-border RMB financing is strong. Hong Kong and overseas companies that are replacing US dollar loans for the purpose of reducing financial costs have objectively boosted the internationalization of the RMB. In response to research from a number of domestic and foreign banks, we learned that there is currently more demand for enterprises to choose RMB loans. Some are even replacing US dollar loans with RMB loans. On the one hand, they are considering reducing financing costs and financial burdens, and on the other hand, they are considering avoiding the risk of interest rate fluctuations and achieving exchange benefits. Furthermore, Chinese dollar bonds are too expensive to finance, and renminbi-denominated bonds issued in Hong Kong — Dim Sum Bonds — have also become a good alternative financing channel. If the Federal Reserve continues to cut interest rates in the future, the interest rate spread between the RMB and the US dollar may shrink or fluctuate, but there is still room for interest spreads, and there is also exchange gains and losses. Industry insiders said that with the rise of emerging global economies, monetary multipolarization to reduce dependence on the US dollar may become a long-term trend. Strong demand for RMB cross-border trade settlement, investment and financing, and foreign exchange risk management will accelerate the maturity of the cross-border RMB ecosystem and help internationalize the RMB.