SHANGHAI, March 31 (Reuters) - The Hong Kong Overnight Interbank Offered Rate for offshore yuan (CNH HIBOR) plunged to -3.725 percent Thursday, the first time it has quoted in negative territory.

Overnight implied deposit rates for offshore yuan fell to below -16 pct, at one point touching as low as -27 percent, the sharpest fall on record, Reuters data showed.

CNH HIBOR represents interest rates contributed by banks each day for reference to traders.

Negative rates could imply low demand for or excess supply of offshore yuan, but analysts who spoke to Reuters struggled to explain the phenomenon.

The onshore and offshore traded yuan have been steadily firming against the dollar in recent days, guided by a stronger fixing from China’s central bank.

The HIBOR plunge comes on the same day the Financial Times reported that the Hong Kong unit of state-owned brokerage Guosen Securities had defaulted on an offshore yuan bond in Hong Kong. (Reporting by Pete Sweeney; Editing by Richard Borsuk)