Hong Kong Yuan Deposits Rise to Record on Appreciation Bets

Yuan deposits in Hong Kong climbed to a record in March on bets the currency’s advance will accelerate, and as global usage increases.

Savings rose 16 billion yuan ($2.6 billion) from February to 668 billion yuan, the Hong Kong Monetary Authority said in a statement on its website today. It was the sixth monthly gain in a row and the smallest increase in four months.

The yuan will appreciate 1.8 percent to 6.12 per dollar in 2013, compared with last year’s 1 percent rally, according to the median estimate in a Bloomberg survey of economists. Global yuan payments increased 33 percent in March from the previous month, making it the 13th most-used currency, the Society for Worldwide Interbank Financial Telecommunication said on April 25.

“There’s larger exposure because of the appreciation trend,” said Dariusz Kowalczyk, a Hong Kong-based strategist at Credit Agricole CIB. “In the near term, we should see further gains in yuan deposits.”

Morgan Stanley raised its end-2013 yuan forecast to 6.1 per dollar from 6.3 yesterday, citing prospects for a wider trading band and a larger base of market participants. Hong Kong handled 341 billion yuan of trade settled in the Chinese currency in March, a 54 percent increase from February, HKMA data show.

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