The Global Market Has Caused Panic And Massive Capital Outflows In China.

The renminbi is under the control of the government.

The smaller exchange rate spreads with more open offshore markets indicate that the downward pressure on the yuan is still limited.

Although the RMB against the US dollar is at a low level for several years, it did not trigger a sell-off in China's related assets as it did last year and earlier this year.

Segra Captial Management LLC, headquartered in Dallas, USA, has grasped the timing of a relatively calm market in the near future, and has increased the position of RMB short positions through the options market.

Adam Rodman, chief investment officer of the company, said that when the extended volatility of options is low, the company will buy long term option contracts short of RMB.

China Foreign Exchange Trade System, China's central bank, said in a commentary on Wednesday that the recent weakening of the renminbi was mainly due to the strong strength of Chinese companies and banks in paying dividends to overseas shareholders and acquiring overseas assets.

Demand.

The renminbi has fallen to its lowest level in nearly six years against the US dollar, rekindling concerns about China's capital outflow, and the short selling of Renminbi has also been revival.

After the Central Bank of China continued to lower the middle price of the RMB against the US dollar on Wednesday, the RMB exchange rate in the offshore and offshore markets declined.

At the end of Wednesday in New York, the RMB was quoted at 1 US dollars to 6.6925 yuan, the lowest level since the end of 2010.

The Central Bank of China sets the RMB's central parity daily and allows the RMB exchange rate to be traded within 2% of this level.

Before that, many investors have abandoned the renminbi short positions accumulated since last summer when the Chinese government unexpectedly pushed the depreciation of the renminbi, causing panic in the global market and causing massive capital outflows to China.

But the short selling of Renminbi this year is painful for many funds.

After the fall of the year, the Central Bank of China increased market intervention.

In order to safeguard the RMB exchange rate, the renminbi gradually stabilized and even strengthened against the US dollar.

In addition, the decision of the Federal Reserve Committee to postpone raising interest rates has helped ease the pressure on the renminbi.

Wall Street journal analysis reported that some investors are starting to sell short yuan.

In the past two months, Smith, chief executive of Crescat Capital LLC, a hedge fund based in Denver, USA, has increased its short position in the renminbi. (Kevin Smith).

Smith said that in addition to the existing concerns about China's huge debts and China's central bank's actions to boost credit and inject huge amounts of money into the financial sector, the British referendum decided to pull out of the EU and increase the pressure on the renminbi. Investors are selling risky currencies and buying dollars.

He said the fund is more confident than ever that it is a good time to short the renminbi.

Since the British referendum in June 23rd, the exchange rate of China's renminbi against the dollar has fallen by about 2% in the bank market.

Crescat has been short selling the Renminbi for two years, but the company with an asset management size of $88 million is not always profitable.

Like many other short selling companies, Crescat suffered losses earlier this year when the yuan strengthened.

However, Smith said that as of Tuesday, Crescat had gained nearly 7% of the yuan, including China's gain of more than 6% in August 2015 when the yuan was devalued.

He said that the renminbi short position is one of the largest holdings of the flagship fund of the company.

To increase the cost of shorting the renminbi, Chinese regulators on Wednesday asked foreign banks to make foreign exchange forward pactions for their clients to pay 20% of the equivalent amount of last month's flat.

A forward contract is the agreement between the two parties to buy or sell an asset at a predetermined price at a particular point in the future.

The new regulation for foreign banks will come into effect in August 15th. Last year, regulators had implemented similar regulations for Chinese banks.