RMB appreciation 'more likely' in Q2

SHANGHAI - There is a greater probability of yuan appreciation in the second quarter as China steps up curbs on home loans to help deter speculative capital inflows, China International Capital Corp (CICC) said.

The State Council said last week banks should stop loans for third-home purchases and suspend lending to buyers who can't provide tax returns or proof of social-security contributions. Imports exceeded exports by $7.2 billion in March, leading to the first trade deficit since 2004, official figures show.

The property rules will "help lower risks of hot-money inflows once the yuan's appreciation resumes", wrote economists led by Hong Kong-based Ha Jiming at CICC, the first Sino-overseas investment bank.