Rapid China Inflows Spur Call for Strongest Yuan Since 1993
- Currency could rise to 6 a dollar on strong fund influx: Citi
- Foreigners boosted pace of adding Chinese notes this year
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The unrelenting pace of inflows heading for China’s bonds and stocks has one yuan bull predicting the currency could strengthen to a level not seen in nearly three decades.
A “flood” of foreign cash will chase yuan-denominated assets in 2021 because they’ll offer far better yield than the rest of the world, according to Liu Li-gang, chief China economist at Citigroup Inc. He predicts the currency could rally 10% to 6 per dollar -- or even more -- by the end of next year. The yuan hasn’t been that strong since late 1993, just before China’s unification of official and market exchange rates triggered a plunge in the currency.