Nov. 2 (Bloomberg) -- China’s non-deliverable forwards rose, snapping a two-day decline, on speculation global funds will pour more money into the world’s fastest-growing major economy as Europe’s debt crisis deters risk-taking.
The currency may become another “safe haven” for global investors, joining the U.S. dollar and the Swiss franc, because of its stability and increasing globalization, Zhang Monan, a researcher at the State Information Center, wrote in a commentary published in today’s Economic Information Daily newspaper. That may result in more pressure for yuan appreciation, the commentary said.
“With the view of China easing policy going into next year, the economy could enjoy robust growth of between 8.5 percent and 9 percent,” said Tommy Ong, head of advisory sales at DBS Bank Ltd. in Singapore. “Next year, we could expect more inflows.”
Twelve-month non-deliverable forwards on the yuan rose 0.14 percent to 6.3698 per dollar, following a decline of 0.4 percent in the past two days. The yuan fell 0.05 percent to 6.3573 in Shanghai, according to the China Foreign Exchange Trade System.
China’s gross domestic product rose 9.1 percent from a year earlier in the last quarter, the smallest gain in two years, official figures show. Growth was 1.6 percent in the U.S., 0.5 percent in the U.K. and 3.4 percent in South Korea.
Premier Wen Jiabao said last week that the government will fine-tune economic policy as needed, fueling speculation two years of monetary tightening will be unwound as inflation slows. China’s economy will expand 9 percent in 2012, outpacing growth of 1.8 percent in the U.S. and 1.1 percent in the euro region, according to International Monetary Fund forecasts released in September.
The People’s Bank of China set the reference rate weaker for a second day, lowering it to 6.3297 from 6.3293. The currency is allowed to trade up to 0.5 percent on either side of the daily fixing. In Hong Kong’s offshore market, the yuan strengthened 0.24 percent to 6.3888.
--Editors: James Regan, Simon Harvey
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