From Bloomberg News (link)
Bank of China, planning to raise as much as $8 billion in an initial public offering, may post a 4.3 billion yuan ($537 million) exchange rate loss this year due to a rising yuan, according to UBS AG, one of the sale’s arrangers.
China’s biggest foreign-exchange bank had a net foreign currency position of $39 billion as of Dec. 31. It made a foreign- exchange loss of 5.1 billon yuan last year due to the yuan’s appreciation, according to UBS research, distributed to fund managers yesterday.
“It’s no surprise that Bank of China is the most exposed to an appreciating renminbi among peer Chinese banks,” the report said. The Beijing-based lender is unable to hedge the risks “due to a thin forex market and regulatory restrictions.” China’s yuan currency is also known as renminbi.
