HONG KONG Jan 4 Hong Kong's overnight yuan
borrowing rate was fixed at 16.95 percent on
Wednesday, hovering around more than three-month highs.
The CNH Hong Kong Interbank Offered Rate benchmark (CNH
Hibor) is set by the city's Treasury Markets Association (TMA).
The overnight contract was fixed at 17.76 percent on Tuesday.
Offshore yuan liquidity has been tight in the past week
mainly due to seasonal factors and holidays, market players say.
In addition, a shrinking yuan pool in Hong Kong also plays a
big role as fewer people are seeking yuan-denominated assets
amid expectations the currency will weaken further.
"The dwindling offshore yuan pool and controls on capital
outflows have led to the elevated Hibor rates recently," said
Liao Qun, China chief economist at Citic Bank International in
Hong Kong, referring to China's tightening of regulations on
outflows in recent weeks.
Yuan deposits in Hong Kong fell by 5.3 percent from a month
earlier to 627.6 billion yuan ($90.23 billion) in November, the
lowest level since January 2013.
($1 = 6.9553 Chinese yuan renminbi)
(Reporting by Michelle Chen; Editing by Kim Coghill)