China NDFs weaken sharply on devaluation jitters

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The price of Chinese renminbi non-deliverable forwards (NDFs) spiked sharply against the dollar in trading in early December, after a big cut in interest rates by the People's Bank of China (PBOC) in late November.

But a long-term reversal in the two-year uptrend of the renminbi is unlikely, especially following the US Federal Reserve's mid-December rate cut that brought the Fed's discount rate to zero, say analysts.

The PBOC, China's central bank, allows the domestic currency, which is not fully