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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (46696)	2/26/2004 5:54:29 AM
From: gumnam	Read Replies (2) \| Respond to of 74559

Jay I am told that now or starting soon you can open fixed deposit bank accounts in the remnimbi in HK banks and they pay about 2% interest for 1 year deposits. Thus you become long remnimbi for 1 year and short USD and earn 2%. In the external currency fwd markets to buy remnimbi on a one year fwd basis costs you around 6%. So if you sell remnimbi fwd for 1 year you earn 6%. If you open a 1year fixed rate deposit at your bank and at the same time buy USD fwd in the currency markets, you can lock about 8% return with no currency view- the main risk being the HK bank you have selected defaults on you within 1 year. What do you think? Cheers Gumnam