Offshore Yuan hits 9-month low

China’s offshore Yuan dropped to a nine-month low today contradicting widespread belief that Yuan’s inclusion in IMF’s SDR would strengthen the currency.

The CNH (offshore Yuan) dropped to 6.7182 per dollar, its lowest since January 7. The onshore market is closed on account of golden week holiday. Consequently, the spread between onshore and offshore yuan has widened to more than 400 pips.

Moreover, Chinese authorities are struggling to halt the slide in the currency as US Fed prepares ground for another rate hike, possibly in December.