For the first time since the August collapse, Offshore Yuan is trading over 1000 pips weaker (relative to the USDollar) than onshore Yuan, signalling outflows are once again escalating. Following the chaos in HIBOR money-markets, Offshore Yuan has crashed to 6.5970 (below August spike lows) to the weakest since Dec 2010. On the heels of this recent divergence between on- and off-shore Yuan, China has suspended some foreign banks from FX trading, we suppose to try and stem the capital outflows.
Offshore Yuan has crashed to 5-year lows against the USDollar...
And blown over 1000pips weaker than onshore Yuan...
Sending signals that outflows are starting to accelerate since The IMF gave China permission to devalue its currency....
Perhaps that is why Reuters reports that:
China’s PBOC said to temporarily suspend some FX business for several foreign banks until end-March, Reuters reporter Umesh Desai says on Twitter, citing unidentified people.
Time for a significant crackdown on the supposedly free-floating currency of The IMF's choice or another significant devaluation is coming soon.