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Weaker, then stronger. Stronger, then weaker, Friday marks the sixth trading day since China’s two renminbi rates implied more currency weakness for the first time in two months – but the signals are very mixed.

A weaker rate for the offshore renminbi against the dollar, relative to its onshore cousin, implies that international investors are betting on a weakening Chinese currency. This has previously spurred capital outflows from the mainland. For most of this year however, the offshore rate has been stronger – unexpectedly – than the onshore rate.

Over the past week however the two rates have began oscillating, surprising watchers, who had largely assumed that the stronger offshore rate was engineered by the People’s Bank of China as part of Beijing’s efforts to stem capital outflows, and that it was set to continue.

By Friday, the two rates were close again with the offshore renminbi at Rmb6.9057 to the dollar and the onshore at Rmb6.9083.

Analysts said a lack of liquidity in the offshore market was largely to blame for the week’s swings.

“It tells me that CNH [offshore renminbi] volatility is very very bad and any rumour or action could trigger very big movements,” said Zhou Hao, strategist at Commerzbank. “In the past, there were at least a few players in the market – banks, hedge funds, and companies. Now there are not many counterparties.”

Renminbi-denominated deposits held in Hong Kong – the biggest offshore trading centre – have shrunk by two-fifths in the past two years.

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