I would like to short USD/CNY (ie, long RMB) at Oanda. But I am curious about how much interest rate I need to pay. http://fxtrade.oanda.com/tools/statistical_information/oanda_interest_rates.shtml Above link suggests that today's interests are: i) Chinese RMB... bid: -12, offer: -11 (pls note the -ve signs for both bid and offer) ii) USD... bid: 2.4, offer: 2.95 Why are there negative signs for both bid and offer for RMB???? Does it mean that no matter I buy or sell I need to pay >10% margin??? It is strange as most of time we should get interest if I buy a currency. Is it b'coz RMB is not easily available so they need to borrow from somewhere else? Anyone can give me some insights?
http://fxtrade.oanda.com/tools/fxcalculators/interest_calculator.shtml If you short 100K of USD/CNY (same as long 100k CNY), you will pay $40.93 in interest charges per 24 hr period. They list the Chinese interest rate as -12, when in reality it is +7.47%
no free lunch here. carrying that position will cost about -15%, market is already pricing in appreciation. the free lunch comes by going long USD/CYN getting paid 13.3% then hedging this by opening a bank account there. its a synthetic USD money market fund that pays a lot