Yuan value cut against dollar
Print Edition
CHINA’S central bank yesterday cut the yuan’s value against the US dollar to its lowest in more than four years.
The People’s Bank of China set the daily reference at 6.4358 yuan to US$1, the lowest since August 5, 2011, the China Foreign Exchange Trade System showed.
The yuan fixing — ahead of a US Federal Reserve interest rate decision, which is widely expected to see a landmark rise — also saw the normally stable currency down 0.8 percent in a week, its biggest seven-day drop since August.
Then, China devalued it by almost 5 percent in a week in what it said was a push to make it more market-oriented.
Pressure on the yuan since then has prompted Beijing to sell dollars to support the currency, with its foreign exchange reserves falling to US$3.44 trillion in November, their lowest in nearly three years.
Analysts said this week’s fall came because China has cut back on such moves.
“We haven’t seen any decisive intervention this week and investors take that as the PBOC allowing a weaker currency,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp.
But he said the central bank may resume buying after the US decision next week “as there’ll be a better picture on the US interest rate outlook.”
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