Yuan Advances on Export Growth Beating Estimates, Spain Bailout
Overseas sales rose 15.3 percent from a year earlier, more than triple April’s 4.9 percent gain and exceeding all 29 estimates in a Bloomberg survey, data showed yesterday. Inflation eased to a two-year low of 3 percent, coming in below the official 4 percent target for a fourth month, the government reported June 9. Spain asked euro-region governments over the weekend for as much as 100 billion euros ($126 billion) to help shore up its banking system.
“As inflation eases, China has more room to stimulate domestic demand,” said Stella Lee, president of Success Futures & Foreign Exchange Ltd. in Hong Kong. “Export growth is a positive surprise, while Spain’s bailout gives investors hope that global governments are working together to tackle problems.”
The yuan rose 0.02 percent to close at 6.3694 per dollar in Shanghai, according to the China Foreign Exchange Trade System. The People’s Bank of China set the reference rate 0.03 percent stronger at 6.3169 today, 0.8 percent higher than last week’s closing price.
In Hong Kong’s offshore market, the yuan advanced 0.05 percent to 6.3688. Twelve-month non-deliverable forwards climbed 0.16 percent to 6.4150, a 0.7 percent discount to the onshore spot rate.
China should accelerate reforms to make the yuan convertible under the nation’s capital account, Shanghai Securities News reported today, citing Wang Xiaoyi, deputy head of the State Administration of Foreign Exchange.
The central bank lowered its one-year lending and deposit rates last week by a quarter of a percentage point to 6.31 percent and 3.25 percent, respectively. It also allowed banks to start offering deposit rates as much as 10 percent above the official rate and doubled the maximum discount for loans to 20 percent.
To contact the reporter on this story: Fion Li in Hong Kong at email@example.com
To contact the editor responsible for this story: Sandy Hendry at firstname.lastname@example.org
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.