Financial analysts attribute prediction to high borrowing costs of renminbi

Although the cost of borrowing renminbi overnight in Hong Kong retreated sharply from the recent high level on Friday, treasury market analysts predicted that lingering tight borrowing costs of offshore yuan will push up interest rates of renminbi term deposits in the city.

The overnight offshore yuan Hong Kong Interbank Offered Rate dropped to 8.67 percent on Friday, down a sharp 34 percentage points from 42.81 percent recorded on Thursday, Treasury Markets Association data showed.