With a president whose finger is never far from the Tweet button, it’s best to be prepared. The People’s Bank of China said today it will sell RMB30 billion (US$4.3 billion) of short-term yuan-denominated securities in Hong Kong next week, signaling its plan to absorb offshore liquidity and cushion against further depreciation of its currency versus the US dollar, which shocked markets yesterday by breaking through the 7-to-1 level and resulting in the US labeling China a currency manipulator.
The float will comprise a RMB20 billion three-month bond and a one-year note of RMB10 billion.
You don’t need us to explain the latest in the US-China trade war. There is plenty about it on scmp.com. All you need us to do is explain that this is obviously good news for the GBA as it strengthens Hong Kong’s role as a marketplace for the world’s second-most powerful currency. Until Shenzhen opens up further, that is.