The offshore market for renminbi contracted at a slower pace in March but still saw the Chinese currency’s globalisation end the first quarter at a three-year low, according to a gauge of its globalisation.

Activity involving the offshore renminbi (CNH) tracked by analysts at Standard Chartered fell in 0.6 per cent in March from a month prior, contracting far less sharply than February’s fall of 6.4 per cent, which was the largest monthly drop on record for the bank’s Renminbi Globalisation Index.

But analysts noted that “None of the index components showed signs of a quick turnaround,” particularly in terms of cross-border payments.

The offshore renminbi’s share of total China goods trade coming in at 13.2 per cent in March, compared to 13.6 per cent in Q4 2016. This was despite relative stability for the onshore renminbi (CNY) and improving economic performance in the first quarter.

Analysts noted corporate entities were more actively managing exposure to renminbi volatility, with the inability to move capital out of China still a prominent concern, “especially among respondents based outside China, possibly as they are more affected by the recent window guidance.”

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