Yuan Depreciation Risk Grows: Times

The strengthening yuan against the U.S. dollar could see a sudden reversal following the accelerating monetary tightening by the Federal Reserve, and China should anticipate the impact of sudden money outflow on the country's financial market, the Securities Times reported citing analysts. Some offshore "hot money" has long positions in yuan and increased the holdings of China Government Bonds in 2021 amid rising global inflation risk. Should it try to flee if the yuan drops, it could shock both the forex and interest rate markets, the newspaper said citing research by Bank of China. On Wednesday, offshore yuan continued to rise near 6.3 against the dollar, touching 6.3036, the highest since April 2018, the newspaper said.