Yuan forwards strengthen most in two months

Government data this week showed consumer prices rose faster than economists forecast last month as exports increased the most in three years. Inflation will be a “big problem” for China this year and commodity import prices should be monitored, Minister of Commerce Chen Deming said Thursday at the annual parliamentary meeting in Beijing.

“The data is strong so the authorities should be more comfortable to resume appreciation when they need to,” said Sebastien Barbe, head of emerging-markets research at Credit Agricole CIB in Hong Kong.

Twelve-month non-deliverable yuan forwards climbed 0.3 percent to 6.6290 per dollar from the end of last week as of 5:30 p.m. in Hong Kong, according to data compiled by Bloomberg. That was the biggest gain since the period ended Jan. 15 and reflects bets the currency will rise 3 percent from the spot rate of 6.8255. The contracts gained 0.2 percent Friday.

The yield on the 4.01 percent note due in May 2015 climbed four basis points this week to 2.74 percent, and the price slid 0.22 per 100 yuan face amount to 106.05, according to the National Interbank Funding Center. A basis point is 0.01 percentage point.

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