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To: TobagoJack who wrote (46702)	2/26/2004 8:56:49 AM
From: elmatador	Respond to of 74559

<<when the RMB is 'adjusted', it may go up for a bit,>> Capricciosa is my favorite, Jay. Sorry Jay, I couldn't avoid

To: TobagoJack who wrote (46702)	2/26/2004 4:23:47 PM
From: gumnam	Read Replies (1) \| Respond to of 74559

But in the trade that I suggest you really do not care what happens to the Remnimbi. You can earn 2% on a bank deposit for 1 year by converting your USD remnimbi. At the same time you ask your full service broker ( at Merrill/HSBC or whoever you use) should be able to get you a Non Deliverable Forward price on Remnimbi against USD. Today the 1year price was 7.8720-7.8880. In that market you just buy USD forward. So net net you have no remnimbi position. You will make 4.8% on the forward and 2% on your bank deposit. So all in all you make 6.8% for the year. All the "smart money" of the world is convinced China will revalue their currency this year and therefore they are willing to sell USD at below spot to bet onthat. Remember financial institutions /hedge funds cannot use the HK bank deposit method and that causes this pricing discrepancy to happen. If you want, I can set up a spreadsheet and send to you to show how it works. The risk you do run is that the bank where you open your deposit fails. Also can you find out for me if a US person can open this bank account sitting in US or do you have to do it in person in HK Thanks