Interbank borrowing cost for the yuan in Hong Kong has reached a seven-month high, fueling talk that mainland banks have been intervening in the market at the behest of the Chinese central bank.
On Monday, the overnight interbank yuan borrowing rate in Hong Kong reached 5.5155 percent, its highest since Feb. 19, the Wall Street Journal reports.
The rate breached the 5-percent mark last Thursday, ending a nearly two-month stretch of relative calm, and has since remained at levels that traders described as elevated, the report said.
The surge in the overnight interbank rate in the offshore market is prompting analysts to suspect intervention by China to thwart bearish bets against the currency.
Chinese banks are believed to have been heavy buyers of the yuan in Hong Kong to support the unit.
It comes on top of other recent measures from Beijing aimed at supporting the currency, such as tightening restrictions on money flowing out of the mainland, the Journal noted.
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