LME clearing house increases amount of offshore renminbi that can be held as collateral (updated)
UPDATE 1-LME clearing house increases amount of offshore renminbi that can be held as collateral Adds LME Clear comment, context from third bullet point
LONDON, June 15 (Reuters) - The London Metal Exchange's clearing house announced enhancements to its margin collateral services on Monday, saying that members will now have more flexibility in their use of offshore renminbi and warrants as collateral.
The amount of offshore renminbi (CNH) that can be held as collateral by each member has been increased by 50%, LME Clear said in a statement, adding that the revised interest rate would be retained until at least the end of 2026.
In addition, the settlement time for lodging and withdrawing CNH was changed from T-2 to T-1.
The LME is owned by Hong Kong Exchanges & Clearing Ltd 0388.HK. Its clearing house has been accepting offshore renminbi as eligible cash collateral since 2015 to support its Chinese market participants.
"The changes announced today will particularly benefit Asian members and users who wish to use CNH, as well as boosting the important role played by warehouses in Hong Kong," Michael Carty, LME Clear CEO, said.
LME Clear also said that it was now able to accept warrants as collateral for underlying metal stored in Hong Kong, in addition to the eight existing locations.
(Reporting by Polina Devitt; Editing by Emelia Sithole-Matarise, Kirsten Donovan)
((polina.devitt@thomsonreuters.com))
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