The market is particularly important in Australia as Australian banks make use of cross-currency swaps to hedge the exchange rate risk associated with their foreign currency bond issuance. Australia has a large share of the cross-currency swap market and this share has grown over the past three years, from 5 per cent in 2007 to 11 per cent in 2010.
Although the renminbi has since 2005 appreciated by around 10-11% against the US dollar and the Japanese yen, it has depreciated continuously against the euro, loosing about 8% of its value against the single currency. Over the same period, China’s trade surplus vis-à-vis the euro area has grown by more than 20%. 3.