RMB principal-free forward is one of the derivatives related to RMB in overseas offshore market. It is also one of the most active products. Since RMB is not freely convertible, the forward exchange rate of RMB can be quoted and delivered in major international convertible currencies without holding RMB for settlement.

The full name of RMB NFD is "USD versus non-deliverable forward foreign exchange".

It is a forward foreign exchange contract based on the RMB exchange rate, which is converted into US dollars according to the RMB exchange rate listed in the Beijing foreign exchange market on the expiration date, and calculated in US dollars, excluding the principal of the price contract, and both parties do not need to hold RMB for settlement. Because RMB can't circulate completely freely, RMB NDF is the main tool for market participants to hedge RMB risks.

For example:

Assume that the current spot exchange rate of USD /CNY is 7.9 174.

Company A's business income is mainly RMB, but it is expected that the exchange rate of the US dollar against RMB will depreciate, and it will sell RMB NDF10 million with the bank for a period of 3 months.

The agreed NDF exchange rate is USD /CNY=7.9074.

Trading day: 06. 10. 1 1 Effective date of the contract: 06. 10. 13.

Pricing date: 07.0 1. 1 due delivery date: 07.0 1. 13.

Fixed price: 07.0 1. 155 official spot exchange rate in the afternoon.

Scenario 1: Assume that the spot exchange rate of USD /CNY on the pricing date is 7.8974; Then Company A can make a profit of $65438 +0266.24.

$65438 +0000000 X(7.9074-7.8974)= 65438 RMB +00000 RMB.

Rmb 10000/7.8974 = USD 1266.24.

Scenario 2: Suppose (2) the spot exchange rate of USD against RMB on the pricing date is USD /CNY 7.9104; Then Company A loses USD 1643.6 1+0.

Us $65,438+0,000,000 x (7.9104-7.8974) =13,000 RMB.

Rmb 13000/7.9 104 = USD 1643.6 1