IDEAS home Printed from https://ideas.repec.org/a/taf/reroxx/v32y2019i1p1621-1644.html
   My bibliography  Save this article

Can onshore spot market progress influence offshore N.D.F. market development for the C.N.Y?

Author

Listed:
  • Chi-Wei Su
  • Kai-Hua Wang
  • Heng-Guo Zhang
  • Rui Nian

Abstract

This study utilises a time-varying wavelet analysis to examine the relationship between the onshore spot market and the offshore non-deliverable forward (N.D.F.) market of the Chinese Yuan (C.N.Y.). Given the presence of structural changes in the two markets, we did not find any stable causality during the sample period. However, in some sub-samples, we found that there is a strong nonlinear causal relationship running from the onshore spot market to the offshore N.D.F. market. Ties between the two markets are closer after the widening of the onshore trading band, first in April 2012, second in March 2014 and again in August 2015. The onshore spot market is heavily influenced by interventions by the People's Bank of China (P.B.C.). These findings imply that offshore N.D.F. market development is not divorced from onshore development, as developments in the onshore spot market influence the offshore N.D.F. market. The results show that the exchange rate markets for the C.N.Y. are not efficient. Thus, to successfully internationalise the C.N.Y., financial expansion of the onshore spot market should keep pace with the growing offshore N.D.F. market to minimise destabilisation of the C.N.Y.

Suggested Citation

  • Chi-Wei Su & Kai-Hua Wang & Heng-Guo Zhang & Rui Nian, 2019. "Can onshore spot market progress influence offshore N.D.F. market development for the C.N.Y?," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 1621-1644, January.
    • Handle: RePEc:taf:reroxx:v:32:y:2019:i:1:p:1621-1644
    DOI: 10.1080/1331677X.2019.1636697
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1331677X.2019.1636697
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1331677X.2019.1636697?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:reroxx:v:32:y:2019:i:1:p:1621-1644. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rero .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.