Yuan Hong Kong Premium Widens as Rules Cap Supply: China Credit
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The premium investors pay to obtain yuan in Hong Kong’s offshore market is widening, after shrinking to zero last month, as the central bank limits supply and demand for the currency to buy renminbi bonds in the city grows.
The yuan traded in Hong Kong at 6.5835 per dollar, 0.13 percent more than the 6.5921 as of 2:30 p.m. in Shanghai, and cost 0.6 percent more on Jan. 10. The Hong Kong rate was cheaper between Dec. 21 and Dec. 28, after the premium reached a record 2.7 percent on Oct. 19. Hong Kong Monetary Authority rules released on Dec. 23 allow lenders to buy the currency onshore for customers’ purchases of goods no longer than three months before the transaction.