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Yuan drops amid worries about China's slowdown
By Hu Xiaocen |
May 25, 2012, Friday
|
Online Edition
Online Edition
CHIESE yuan reached a five-month low against the US dollar as worsening debt crisis in the Europe strengthened the dollar, and the deepening slowdown of the world's second-biggest economy made the yuan less popular.
The yuan registered a third weekly loss against the strengthening dollar. Risk-averse investors sought for hard currency as safe haven, as the likelihood of Greece's exit from the Euro zone has been growing since early this month, pushing up the dollar index to its highest level since September 2010.
The currency also faced additional pressure from a deepening domestic slowdown. HSBC and Markit Economics said yesterday the nation's manufacturing activities contracted for the seventh consecutive month in May. Additionally, the 21st Century Business Herald reported earlier this week the nation's four biggest banks have extended a significantly low level of new loans during the first 20 days of May, suggesting a waning credit demand amid gloomy economy.
The yuan dropped 0.47 percent this week to 6.3518 per dollar as of 14:30 in Shanghai today, according to the China Foreign Exchange Trade System. It has declined 0.6 percent this month, the worst month in at least five years.
The People's Bank of China set the central parity rate at 6.3260 today, higher than Thursdays' 6.3247, to follow the strengthening dollar. The yuan is allowed to rise or fall by 1 percent from the reference rate on each trading day.
The yuan registered a third weekly loss against the strengthening dollar. Risk-averse investors sought for hard currency as safe haven, as the likelihood of Greece's exit from the Euro zone has been growing since early this month, pushing up the dollar index to its highest level since September 2010.
The currency also faced additional pressure from a deepening domestic slowdown. HSBC and Markit Economics said yesterday the nation's manufacturing activities contracted for the seventh consecutive month in May. Additionally, the 21st Century Business Herald reported earlier this week the nation's four biggest banks have extended a significantly low level of new loans during the first 20 days of May, suggesting a waning credit demand amid gloomy economy.
The yuan dropped 0.47 percent this week to 6.3518 per dollar as of 14:30 in Shanghai today, according to the China Foreign Exchange Trade System. It has declined 0.6 percent this month, the worst month in at least five years.
The People's Bank of China set the central parity rate at 6.3260 today, higher than Thursdays' 6.3247, to follow the strengthening dollar. The yuan is allowed to rise or fall by 1 percent from the reference rate on each trading day.
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