Offshore Yuan Strengthening Continues Amid Tight Liquidity
(Beijing) — Analysts say efforts by China to tighten liquidity in Hong Kong’s offshore yuan market have driven sharp gains in the currency, burning short sellers and reflecting the central bank’s growing strength in defending the yuan overseas.
China’s offshore yuan continued to strengthen against the U.S. dollar on Thursday, with the exchange rate dropping to as low as 6.7863 yuan per dollar in afternoon trading before bouncing back a little. That means its value strengthened against the greenback by more than 2%, including the previous day’s gain. That is the biggest two-day increase in the offshore yuan’s value since records began in 2010, according to Bloomberg LP.