Bears scramble for yuan as China chokes flows

Beijing

CHINA'S efforts to choke capital outflows are beginning to pay off, with the offshore yuan surging the most on record as traders scrambled for a currency that's becoming increasingly scarce outside the nation's borders.

The yuan gained 0.5 per cent at 6:48pm in Hong Kong, taking its two-day move to 1.8 per cent, poised for its biggest gain in data going back to 2010. The overnight deposit rate in the city rose as high as a record 100 per cent, while the spread between the offshore and onshore exchange rates reached the widest since 2010. Bloomberg News earlier reported Chinese policy makers were encouraging state-owned enterprises to sell foreign currency.