The offshore renminbi market is expected to continue its robust growth in 2015, reaping the benefits of favourable policy and market infrastructure, as well as the consolidation of renminbi as an increasingly international currency.

Further developments and policies are expected to impact the offshore renminbi market next year, according to a Deutsche Bank report issued on December 15. These include the expansion of the free trade zone to more regions to support the currency's cross-border business.

It is also anticipated that additional renminbi clearing banks will be set up in Latin America and possibly other regions and the two-way renminbi investment schemes will be expanded. The bank also expects the Shenzhen Stock Connect will be launched in the second half of 2015 and both corporate ODI investment flows and the renminbi qualified domestic institutional investor (QDII) programme to grow at a faster pace than in 2014.

Deutsche Bank forecasts the renminbi cross-border trade settlement to reach seven trillion renminbi in 2015, or 25% of China's global trade volume, while the offshore deposit base is projected at 3.25 trillion renminbi. It also estimates the currency's net bond supply to reach 250 billion renminbi.

The bank highlights five key developments in the offshore renminbi market in 2014 - liberalizing renminbi cross-border flows; opening up capital accounts; accelerating interest rate and exchange rate reforms; strengthening offshore renminbi infrastructure and boosting global financing cooperation and steady growth in the offshore renminbi liquidity pool and offshore renminbi products.

By the end of November, about 98 foreign institutions had received renminbi qualified foreign institutional investor (QFII) licenses with an investment quota of about 298 billion renminbi. About 173 foreign institutions have access to the onshore interbank bond market with a total quota of about 600 billion renminbi, according to Deutsche Bank's estimates.

To assist the expansion of renminbi business to more offshore centres, the People's Bank of China (PBoC) designated seven new renminbi clearing banks in 2014 and signed renminbi swaplines with six central banks. The PBoC currently maintains renminbi cross-currency swaplines with 28 central banks with a total notional amount of 3.1 trillion renminbi. At present, about 30 central banks and sovereign wealth funds have included renminbi in their official reserves and renminbi has become the seventh global reserve currency.

In terms of offshore renminbi fixed income market, the gross supply in the offshore renminbi market reached 560 billion renminbi in 2014, up 46% from last year. The size of the offshore renminbi fixed income market is up 31% from 2013 to 760 billion renminbi, with the offshore renminbi bond market surging 40% to 500 billion renminbi, while the CD (certificate of deposit) market rose 7%.

In Taiwan, the renminbi Formosa bond issuance jumped 96%, bringing the total of that market to 31.4 billion renminbi.