Bloomberg
Yuan deposits at Hong Kong banks climbed 14 percent last month, the biggest increase in a year, as residents bet China’s will end the currency’s 22-month peg to the U.S. dollar.
Deposits in the currency climbed to 80.9 billion yuan ($11.8 billion) in April from 70.8 billion yuan the previous month, according to figures from the city’s monetary authority.
President Barack Obama, pressed by the U.S. Senate, last month urged China to allow a more flexible yuan, which has been pegged to the dollar since 2008. Expectations for appreciation eased this month as sovereign debt concerns in Europe helped China’s currency strengthen 17 percent this year against the euro.
Twelve-month non-deliverable forwards traded at 6.7475 as of 4:23 p.m. in Hong Kong, reflecting bets the yuan will strengthen 1.2 percent from the spot rate of 6.8281. The contracts at the end of April predicted a 3.2 percent appreciation over one year. Individuals in Hong Kong are allowed to exchange 20,000 yuan per day, according to the HKMA’s Web site.
--Editors: Sandy Hendry, James Regan
To contact the reporter on this story: Bob Chen in Hong Kong at bchen45@bloomberg.net ; Sophie Leung in Hong Kong at sleung59@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net .
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