(ECNS) - The People's Bank of China (PBOC) said it will issue 10 billion yuan in three-month bills and 10 billion yuan in one-year bills in Hong Kong on Nov. 7, a move expected to make it more expensive for speculators to take short positions on the Chinese currency.
Experts believe the issuance in Hong Kong, a global financial center, will help maintain stability of the yuan as it hit its weakest levels in more than 10 years.
Cai Hao, a researcher with National Institution for Finance and Development at the Chinese Academy of Social Sciences, said tightening offshore liquidity raises the cost of short selling.
Issuance of 20 billion yuan in bills is just a small volume and will signal that the central bank is very keen to stabilize the currency, Cai added.
E Yongjian, an analyst at Bank of Communications, said the issuance will also help the PBOC guide market expectations and steady the yuan.