Reported 6 months ago
The recent drop in offshore yuan forwards is fueling discussions about the People's Bank of China potentially loosening its hold on the managed currency to enable its decline. This disruption in the forward market suggests an increased availability of the Chinese currency for traders to take inexpensive short positions. Speculation arises on whether Beijing will show more tolerance for currency weakness amidst growing capital outflows and trade tensions, hinting at a potential boost for the export-driven economy. Various factors, such as increased offshore foreign currency conversions and regional regulators' guidance for yuan dividend payments, contribute to the higher offshore yuan liquidity.
Source: YAHOO