SHANGHAI, May 6 Reuters The yuan39;s slump has triggered a scramble by Chinese companies to hedge against the risk of further depreciation, which analysts say could add downward pressure on the currency.

The yuan39;s 4 tumble in April, its steepest monthly drop since foreign exchange reforms of 1994, is being driven by portfolio outflows, a rising U.S. dollar and a gloomy economic outlook at home.

Lopsided corporate hedging presents yet another risk to the currency as it touched a fresh 18month low on Friday and jitters swept global markets.

The expectation of further renminbi depreciation has pushed more companies to hedge against the risk, said Wang Dan, chief economist of Hang Seng Bank China, calling the yuan by its official name.

By locking into a forward contract, demand for dollars rises immediately in the market, imposing more downward pressure on the renminbi, she said.

Meanwhile, exporters39; views on what to do with their proceeds are diverging, Wang added, with some converting more dollar revenue to yuan in recent weeks, while others are holding out and betting they can get a better price if the yuan keeps falling.

Yuandollar forward transactions nearly doubled from a year earlier to 100 billion yuan 15 billion in April, official data showed, the heaviest month of trading since late 2017.

The data does not show the direction of the bets, but nondeliverable forwards are priced for a steady decline in the yuan over the next year and sentiment suggests…