Fixed D, RMB Vs SGD

[Big Toe]

It's a very tough investment environment. Low yields, high risk everywhere.
Keeping a bit of cash and waiting for opportunities to come along.
Wish to stay liquid and thus thinking of parking some money in Fixed D temporarily.
SGP interest rates are next to zero, pointless, so I am thinking of RMB time deposits, which offers a better rate and pretty low currency risk. My question is will RMB continue to strengthen against the SGD? My gut feel is yes but probably not by much.
Even though I purchase significant amounts of RMB for goods, I am clueless about currency so any expert opinion is greatly appreciated.

[greengiraffe]

http://www.businesstimes.com.sg/governme...on-tuesday

China, Singapore to start direct currency trading on Tuesday
28 Oct5:50 AM
Shanghai

CHINA will begin trading its yuan currency directly with the Singapore dollar on Tuesday, the national foreign exchange market operator said, in the latest move to promote international use of Beijing's unit.

The Singapore dollar will be added to the China Foreign Exchange

[cif5000]

My question is will RMB continue to strengthen against the SGD? My gut feel is yes but probably not by much.

I had a RMB bank account 8 years ago. I expected RMB to appreciate against SGD. It didn't.

http://www.xe.com/currencycharts/?from=S...Y&view=10Y

[cfa]

Please share which bank offer best RMB interest rate , thanks.

[Belg]

My question is will RMB continue to strengthen against the SGD? My gut feel is yes but probably not by much.

I had a RMB bank account 8 years ago. I expected RMB to appreciate against SGD. It didn't.

http://www.xe.com/currencycharts/?from=S...Y&view=10Y

We are in the middle of a transition in China to change from a manufacturing economy to a internal consumption - service oriented one. It make sense to have a lower RMB during the manufacturing stage and it might have been controlled by China Banks to achieve it. The long term prospects for RMB should be an uptrend.

[specuvestor]

I think about 7 years ago when CNY reach parity with HKD I thought HKMA would use the chance to peg HKD to RMB 1:1. My personal view which was met with much skepticism was that CNY will go to pre 93 devaluation level. It is now there.

Agree with Belg view but the issue is SGD is also an appreciating currency. So both Belg and cif5000 are right but the basis is different. If I am a USD linked currency or a dollarised economy the carry trade is quite obvious for next 3-5 years when demand will be increasing for CNY when it internationalises. But if we are SGD consumer then it gets bit choppier

[valuebuddies]

Interesting discussion. My liquidity fund is low, thus I only kept them with OCBC 360 account (which earns max 3.05%) and sometime SCB Bonus$aver (which earns max 1.88%). No point for me to turn to RMB since it is not very much higher than what I am getting now. There are also few bonds on exchange which offer good rate at reasonable premium.

[Big Toe]

Thank you for the feedback, I guess it does not make a lot of sense to have a liquidity fund locally in RMB since both currencies is likely to remain strong. The transaction cost of conversion will probably eat away all potential gains. What I could do is to hedge against the rising RMB by depositing directly in associate's company's mainland china account and use that account to purchase goods/services. This will almost eliminate almost all transaction cost(s).