Exporters39; dollar pile tops 836 billion
Options pricing suggests increased demand
Businesses seek new markets, twoway trade to offset risk
SHANGHAI, Nov 22 Reuters Chinese firms are squirreling away even more dollars, pricing contracts in yuan and opening import lines to mitigate currency risks as trade tensions threaten to roil foreign exchange rates.
The trend shows exporters are preparing for a longterm shift in trade towards Asia, Latin America and Africa, and safeguarding against potential currency fluctuations like those seen during U.S. Presidentelect Donald Trump39;s first term.
Knifeedge margins are also adding to companies39; anxieties, with spot markets already pushing the dollar about 2 higher on the yuan in the weeks since the U.S. election on Nov. 5.
There39;s an obvious spike in willingness to hold dollars offshore, said David Jiang, founder of risk management consultancy Qian Jing.
A business in eastern Jiangsu province, which earns 300 million in annual exports, wants help to protect 5 margins from currency risks as it must also navigate Trump39;s threat of imposing 60 tariffs on Chinese goods, he said.
For now, most firms are holding on to their dollar earnings from exports and keeping them offshore, if possible. Onshore foreigncurrency deposits swelled 6.6 to 836.5 billion over the 12 months to endOctober, central bank data showed.
Analysts39; average forecast is for the yuan to fall to 7.3 per dollar by the end of next year from around…