Yuan Short Sellers Risk Getting Burned on China Stocks Rescue
- Stocks rescue plan hits two birds with one stone, ANZ says
- Offshore yuan’s funding costs jumped in Hong Kong on Tuesday
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The yuan looks set to become a key beneficiary of China’s plan to stem a stock-market rout, as the equities rescue package would exacerbate a scarcity of the currency overseas, putting a squeeze on short-sellers.
The offshore yuan will extend gains after posting its biggest advance in two weeks on Tuesday, according to Mizuho Bank and Malayan Banking Berhad. The banks expect offshore yuan liquidity to tighten with Beijing said to be considering 2 trillion yuan ($278 billion) of onshore stock purchases mainly from the overseas accounts of state-owned enterprises to stem a selloff.