In C22 MKR SA FX, where a bank is permitted to hold positions denominated in CNY and CNH, should CNH balances be combined with CNY balances in Row460, or included in Row470 under Other currency positions on the basis that CNH has its own readily-verifiable exchange rate and exposure against the reporting currency? For C22 Row020, if CNH balances are reported in Row470, should CNH be included in List of Closely correlated currencies against the Chinese Yuan (CNY) in Annex 1 to ITS ON CLOSELY CORRELATED CURRENCIES UNDER ARTICLE 354(3) OF REGULATION (EU) 575/2013?
We are aware that CNY is the only designated ISO 4217 currency code covering all activities in Chinese renminbi, whether onshore or offshore. However, we work with many banking clients who maintain positions and balances in CNH and some who hold positions in both CNH and CNY. For reporting purposes, balances are translated into reporting currency at the published exchange rate applicable to each. Banks with balances in CNY and CNH maintain and manage the two instances of the currency in the same way as they do for any other currency, treating them totally separately for internal reporting and risk management purposes.
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