A THRIVING black market in the yuan has sprung up in Mongkok. Dealers are busy exploiting the lack of an efficient exchange rate mechanism. Customers attracted to the Mongkok branch of the Po Sang Bank, which is the designated provider of exchange services in the territory, are being accosted by kerb traders who claim to offer a better rate of exchange. The dealers were recently offering to sell yuan at 118 per HK$100, against the official rate of 117.65. Although the deals are legal in Hongkong, and are too small to affect the official rates of exchange, economists warn that there could be problems if they are allowed to get out of control. The growth mushrooming of the Mongkok Kerbside Foreign Exchange bears out warnings issued last month that excessive administration controls of the yuan exchange rate would spawn an unofficial market.