The cost of borrowing yuan in Hong Kong fell for a second day on speculation funds are returning after China’s intervention in the offshore currency market soaked up cash and pushed up interbank rates to records.
The overnight Hong Kong interbank offered rate declined 4.7 percentage points to 3.61 percent on Thursday and the one-week rate dropped one percentage point to 10.96 percent. The one-day rate had jumped to an all-time high of 66.82 percent on Tuesday.
The yuan traded in Hong Kong halted a five-day gain and weakened 0.36 percent to 6.5977 per dollar as of 11:18 a.m. local time, according to data compiled by Bloomberg. The onshore rate fell 0.22 percent to 6.5891 in Shanghai even after China’s central bank kept its daily fixing steady for a fifth day.