THE unrelenting pace of inflows heading for China’s bonds and stocks has one yuan bull predicting the currency could strengthen to a level not seen in nearly three decades. He predicts the currency could rally 10% to 6 per dollar -- or even more -- by the end of next year. The yuan hasn’t been that strong since late 1993, just before China’s unification of official and market exchange rates triggered a plunge in the currency. Also, sustained appreciation in the currency could attract speculative money inflows, fueling local asset bubbles and creating financial risks. The last time the yuan got close to 6 was in January 2014, when the currency was bolstered by hot money inflows.

Source: The Star December 13, 2020 00:45 UTC