The People’s Bank of China (PBOC) has suspended new offshore product sales, according to Lombard Odier.
The Swiss private bank’s comments refer to suspension of the PBOC’s Renminbi Qualified Domestic Institutional Investment (RQDII) programme, which allows yuan to be channelled into investments outside of China.
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However, the PBOC has yet to release any official statement to confirm this.
Head of Asia at Lombard Odier Vincent Duhamel says: "Before, there were more institutions that were trying to create products for clients to diversify – which is why I think the PBOC put a stop to it, because there was so much pressure building up with financial institutions creating products to accommodate the needs of Chinese clients that wanted to diversify on a global basis. The PBOC was trying to figure how to do it in a more systematic and orderly fashion."
Lombard Odier launched a fund in November last year to help channels investors’ capital out of China, just before the PBOC’s early December shutdown order. The fund invests into a global multi-asset strategy that the private bank manages out of New York. Its second release was disrupted by the PBOC order.
Depending on when the PBOC lifts this suspension, the private bank admits that a change in strategy or setup may be required.
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By GlobalDataChief executive of private banking Asia for Lombard Odier Vincent Magnenat says: "We are discussing different ways and models. It’s a partnership for the medium and long term."
