Onshore & Offshore Yuan spread near 4-Year high

As the intervention of China's central bank seems to have failed, the spread between the onshore and offshore Yuan has widened to the highest level in almost four years.

The spot market CNY was seen at on Monday, leaving its intraday low at , still down 0.12% from the previous close of .

China is facing a cruel reality, with worsening economic data and signs of huge capital outflows not helping a government which is already trying to prevent the economy from huge shocks.

Over the weekend, China informed that it will allow pension funds to buy shares for the first time to boost the demand for stocks, suffering a record sell-off over the least few weeks. Pension funds will be now allowed to invest 30% of their total net assets in stocks. The Shanghai Composite fell over 8% on Monday - the most since 2007.

The problems in China are based on poor economic data, as minimum or no growth is seen in the world's second largest economy, while indebtedness remains one of the major problems of local governments. The capital outflows were only a natural mirror to such problems and the yuan reflected this through a drop at the central bank and financial institutions.