No Happy New Year in China as currency, liquidity fears loom

Hong Kong

CHINA bulls could be facing a grim New Year's eve.

The first day of 2017 is when an annual US$50,000 quota to convert the yuan into foreign exchange resets, stoking concern that there will be a rush to sell the local currency. With tax payments and a regulatory assessment also tightening liquidity in the money market towards year-end, January may bring scant relief as lenders prepare for stronger cash demand before the Chinese New Year holidays, which are only a month away.