Offshore Yuan Climbs Amid Speculation Exporters Selling Dollars

  • PBOC likely to seek stability in run-up to IMF decision: ANZ
  • Chinese leaders meet in Beijing to work on five-year plan

The yuan traded in Hong Kong rose for a second day as the central bank raised its fixing and amid speculation exporters are selling dollars to pay month-end bills.

The offshore yuan, which moves freely, rose 0.02 percent to 6.3896 a dollar as of 4:44 p.m. in the city, data compiled by Bloomberg show. The currency advanced as much as 0.18 percent earlier. The People’s Bank of China strengthened the onshore yuan’s reference rate by 0.09 percent to 6.3494.

“Many export companies are selling the dollar as the month will conclude, pushing the yuan stronger,” said Irene Cheung, a currency strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “The fixing is stronger than we expected” and authorities are likely to keep the currency stable in the short term before the International Monetary Fund decision on whether to grant it reserve status, she said.

The PBOC scrapped a deposit-rate ceiling on Friday, a move that will improve the chances of the IMF adding the yuan to its basket of reserve currencies as it shows financial liberalization is still on track, according to Oversea-Chinese Banking Corp. The Washington-based lender’s decision is due next month. An improvement in Chinese factory profits also supported the offshore yuan, said Zhou Hao, a senior economist at Commerzbank AG in Singapore.

Net income at industrial companies contracted 0.1 percent in September from a year earlier, compared with an 8.8 percent decline in August, official data showed today.

Five-Year Plan

Chinese leaders are gathering in Beijing this week to formulate the country’s 13th five-year plan. Authorities will discuss a blueprint for 2016-2020 that will address topics including propelling economic and political development during the four-day meeting that started on Monday, the official Xinhua News Agency reported Tuesday. China’s leadership is considering a pledge to liberalize the capital account by 2020, a move that would allow funds to flow freely across its borders, according to a person familiar with the discussions who asked not to be identified.

The onshore yuan, which is restricted to moving a maximum 2 percent on either side of the daily fixing, closed unchanged at 6.3532 a dollar, according to China Foreign Exchange Trade System prices.

— With assistance by Tian Chen

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