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Bears Scramble for Yuan as China Chokes Flows, Aids Currency

  • Offshore yuan set for biggest two-day gain on record
  • Overnight yuan deposit rate jumps to 80% in Hong Kong
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Traders Scramble for Yuan as China Chokes Outflows

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China’s efforts to choke capital outflows are beginning to pay off, with the offshore yuan surging the most on record as traders scrambled for a currency that’s becoming increasingly scarce outside the nation’s borders.

The yuan gained 0.5 percent at 6:48 p.m. in Hong Kong, taking its two-day move to 1.8 percent, poised for its biggest gain in data going back to 2010. The overnight deposit rate in the city rose as high as a record 100 percent, while the spread between the offshore and onshore exchange rates reached the widest since 2010. Bloomberg News earlier reported Chinese policy makers were encouraging state-owned enterprises to sell foreign currency.