01-13-2016, 11:14 PM
Wild swings in the offshore interbank rate in Hong Kong (HIBOR) are another indicator for PBoC intervention and yuan weakness. It also suggests limited liquidity:
China eased its purchases of offshore renminbi on Wednesday after succeeding in eliminating the gap between onshore and offshore exchange rates. The spread between the tightly controlled onshore US dollar rate for the renminbi and the rate offshore widened to a record of more than 2 per cent last week, as international investors bet the renminbi would weaken far more sharply than the People’s Bank of China would like.
Renminbi borrowing rate plunges in Hong Kong - FT.com
A byproduct of the PBoC’s attempts to stem the speculation by intervention was a spike this week to a record high of 66.8 per cent for the overnight CNH Hong Kong Interbank Offer Rate (Hibor), the cost of borrowing the currency in the territory. On Wednesday, Hibor plummeted to 8.3 per cent as liquidity returned to the market when the PBoC stepped back and the Hong Kong Monetary Authority, the de facto central bank, continued injecting support to banks.