Pressure On Yuan Continues: China Blames “Selectively Blind, Jealous People” For Sell-off

The value of the offshore yuan vs. the U.S. dollar continues to sink following a brief intervention respite by Chinese authorities.

Yuan Bears Swamp People’s Bank of China

China needs to float the yuan and let the currency get where it’s going to go because intervention never works. It just drains reserves, ultimately making matters worse.

Yuan bears see the futility of the intervention schemes as Depreciation Bets Swamp PBOC Fightback.

The yuan traded in Hong Kong fell as much as 0.3 percent, taking its discount to the currency in Shanghai to 0.97 percent. That’s the most since Jan. 11, when the People’s Bank of China launched a two-pronged attack on short-sellers by mopping up the currency overseas and choking supply of yuan from the mainland. The assault pushed the offshore rate to a premium that week, before it swung the other way again.

“Bears are not giving up on shorting the yuan simply because of the PBOC’s attacks, and they are preparing to return to the game,” said Kenix Lai, a foreign-exchange analyst at Bank of East Asia Ltd. in Hong Kong. “There will be a very intense confrontation between short-sellers and the PBOC in the near term. While the market strongly believes there’s room for further declines, the central bank will try its best to keep the yuan stable.”

This comes even though Chinese authorities applied stricter capital controls to scare off speculators and stem record capital outflows. The nation has increased scrutiny of funds being transferred overseas and limited advance foreign-exchange purchases for overseas investments.In a commentary on Wednesday, the official People’s Daily newspaper said that yuan bears who foresee a hard landing are either selectively blind, being jealous or serving their own needs.

China Blames Selectively Blind, Jealous People

Blaming the bears, the blind, and the jealous is a sure sign officials are in serious trouble and are clueless as to what to do next.