SHANGHAI, Sept 30 (Reuters) - China’s yuan forwards climbed on Wednesday to the highest in more than three years, as liquidity demand jumped ahead of the Golden Week holiday.
Overnight onshore dollar/yuan swap points rose to a high of 108 points in morning trade, the loftiest since January 2017, while the offshore swap point for the same tenor hit 75 points, the highest since June 2017.
Traders said tight fund conditions led to rising demand for the currency from financial institutions ahead of the holiday.
The central bank drained cash from the interbank market, prompting many big lenders unwilling to lend to smaller peers. This week, the People’s Bank of China (PBOC) has drained 210 billion yuan via open market operations.
Thursday’s National Day kicks off the holiday period, when financial markets will be shut until Oct. 8, with trade to resume on Oct. 9. (Reporting by Winni Zhou and Andrew Galbraith; Editing by Clarence Fernandez)
Our Standards: The Thomson Reuters Trust Principles.