Hong Kong should start a yuan deliverable forwards market to boost its ability to compete with Shanghai in renminbi trade and investment, said Frances Cheung , a senior strategist at Credit Agricole CIB.
China’s benchmark money-market rate rose, snapping a two-day decline, on speculation cash supply will tighten due to a drop in the amount of central bank bills and repurchase agreements that are maturing.
China’s 3 billion yuan ($450 million) sale of two-year bonds to individual investors in Hong Kong may pay interest of about 2 percent because of the limited supply of yuan assets in the city, says Western Asset Management Co.
China’s one-year swap rate was near a 10-week high on speculation further monetary tightening is planned after this year’s fifth increase in reserve-ratio requirements takes effect tomorrow. The yuan was little changed.