yuan+arbitrage - China May Allow Offshore Yuan to Be Used...

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By Sophie Leung and Andrea Wong - Jan 18, 2011 Jan. 18 (Bloomberg) -- China’s central bank is considering a proposal for yuan held outside of the mainland to be used for inward investment, according to Zhang Jianjun, president of a Shenzhen arm of the monetary authority. “We are actively studying the foreign direct investment plan” and the State Council has been consulted, Zhang said today at the Asian Financial Forum in Hong Kong. No timetable has been set and any easing of restrictions must be of benefit to the “real economy,” he added, noting that policy makers want to avoid changes that would aid speculation on the spread between the yuan’s exchange rates in Shanghai and Hong Kong. Yuan deposits in Hong Kong probably totaled a record 300 billion yuan ($46 billion) at the end of last year, more than triple the level six months earlier, Hong Kong Monetary Authority Chief Executive Norman Chan said today at the conference. China is promoting the yuan’s use in global trade and finance after Premier Wen Jiabao said in March he is “worried” about holdings of assets denominated in dollars. The yuan gained 0.12 percent to 6.5854 as of 3:49 p.m. in Shanghai, according to the China Foreign
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This note was uploaded on 07/30/2011 for the course FIN 111 taught by Professor Mark during the Spring '11 term at HKU.

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yuan+arbitrage - China May Allow Offshore Yuan to Be Used...

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