Offshore yuan weakens past 6.92 per dollar

    THE yuan weakened past the 6.92 per U.S. dollar level in offshore trade yesterday to a near six-year low.

    It eased to 6.9218, the lowest since the yuan began trading offshore. It later edged back to 6.9195 in afternoon trading. The offshore yuan has fallen about 2 percent so far this month amid a surging U.S. dollar, which is triggering fears of capital outflows from China and other Asian emerging markets. Onshore China, the yuan is hovering near 8-1/2-year lows.

    New yuan fix ‘encourages capital flight’

    THE new way China fixes the yuan exchange rate “encourages” capital flight and has led to a gradual depreciation of the currency, according to a former member of the central bank’s Monetary Policy Committee.

    Yu Yongding wrote in Shanghai Securities News on Tuesday that the new mechanism adopted by the People’s Bank of China to set the yuan’s midpoint rate did not allow for “true two-way volatility” in the exchange rate, and had hurt foreign exchange reserves as a result. “Preventing the yuan from reaching market equilibrium is objectively a rejection of raising the cost of capital flight,” wrote Yu, a former adviser to the central bank and one-time member of its monetary policy committee. “It even encourages capital flight.”

    Shanghai exchange to raise metals margins

    THE Shanghai Futures Exchange said Tuesday it will raise margins and trading limits on futures contracts including copper, aluminium, zinc, lead, nickel, tin, rebar, hot rolled coil, rubber and bitumen, effective from today.

    It will raise margin requirements to 9 percent from 8 percent and the trading limit to 7 percent from 6 percent, the exchange said in a notice posted on its website.

    Evergrande boosts stake in Vanke to 10%

    CHINA Vanke Co. said yesterday that China Evergrande Group had bought another 551.96 million A shares in Vanke in August and November, doubling its stake in the Shenzhen-based developer to 10 percent.

    Vanke, which is at the center of a rare high-profile and complex corporate battle, said Evergrande and nine of its controlled firms had hiked their stakes in the company to 1.10 billion A shares during Aug. 12-22 and Nov. 9-22, from 551.96 million A shares, or 5 percent of the issued share capital.