Offshore Fears and Onshore Risk: Exchange Rate Pressures and Bank Volatility Contagion in the People’s Republic of China
The findings contrast with one view that the offshore spot market for the currency, listed as CNH, is a shock absorber for the PRC financial system. The analysis suggests that further offshore exchange market movements arising out of news, such as increasing trade friction with the United States, will generate greater volatility in the PRC’s banking sector.
- Uncertainty, CNH Markets, and Bank Volatility
- Robustness: CNH Volatility or CNH-CNY Spread?