Dollar Gets Costlier to Borrow in China in New Sign of Yuan Woes
- Gap between onshore funding rate, SOFR hit widest since July
- Beijing may cut FX requirements to boost liquidity, says ANZ
Despite the nation’s $3.2 trillion foreign reserves, the amount of foreign currencies that Chinese companies and banks can tap is subject to a confluence of factors, including supply from large state-owned lenders.
Photographer: Paul Yeung/BloombergThe premium to borrow dollars in China’s local markets has jumped over the past month, another example of the resurgent US currency’s global reach and persistent headwinds facing the yuan.
China’s overnight interbank dollar lending rate hit a record 5.47% on March 29 after a steady climb, before easing to 5.42% Thursday, Bloomberg-compiled data show. That has pushed its gap with the US secured overnight financing rate, a global benchmark, to the widest since July twice in the past two weeks.