Yuan Rises in early APAC

The yuan strengthened on Monday after a central bank researcher said there was room to raise interest rates in the short term, easing expectations of capital outflow from the mainland.

“There is room for an increase in interest rates in the short term as industrial product prices and corporate profitability have improved since last year,” the People’s Bank of China’s (PBOC) research bureau deputy head Ji Min told China Daily over the weekend.

Official rhetoric has been turning relatively hawkish in recent weeks as reports showed central bank researchers had agreed higher interest rates would help squeeze any asset bubble and curb debt expansion.

Other PBOC officials believe the potential interest rate hikes and the promotion of production capacity will further improve returns on investments by industrial enterprises.

Similarly, Stephen Innes, APAC head of trading at Oanda, forecasts the yuan to reach 6.30 this year because of prolonged US dollar weakness and given the “PBOC appeared unconcerned with rising rates and more concerned with attracting capital inflows”.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes