Yuan Forwards Decline After China Ministry Says Trade Surplus Will Shrink
Yuan forwards declined on speculation appreciation pressure will ease after China’s commerce ministry said the country’s trade surplus will narrow.
China’s 2010 trade surplus will “definitely” be smaller than in 2009, Vice Commerce Minister Zhong Shan told reporters in Beijing today. The central bank has kept the reference rate for yuan trading little changed over the past two days after U.S. Treasury Secretary Timothy F. Geithner met Chinese Vice Premier Wang Qishan in Qingdao on Oct. 24 to discuss ties between the two nations.
“The shrinking trade surplus will ease pressure on the yuan,” said Zhao Qingming, a senior analyst at China Construction Bank Corp. in Beijing, the country’s second-largest lender. “There won’t be any big change in the exchange rate following Geithner’s meeting with Wang.”
Twelve-month non-deliverable forwards weakened 0.3 percent to 6.4600 per dollar as of 11:58 a.m. in Hong Kong, reflecting bets the currency will strengthen 3 percent from the spot rate of 6.6614, according to data compiled by Bloomberg.
Exports exceeded imports by $17 billion in September, the smallest monthly surplus in five months and bringing this year’s total trade balance to $121 billion, according to customs bureau data on Oct. 13.
The central bank set the reference rate at 6.6762 per dollar today, compared with 6.6729 yesterday.
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