Yuan Weakens to Five-Month Low Against Rallying Dollar

Xu Wei

(Yicai Global) June 25 — The People’s Bank of China diminished the yuan’s central parity rate against the dollar this morning, marking the fourth straight trading day of depreciation and a five-month low of 6.4893.

In spot trading on the Chinese mainland, the yuan can be valued at 2 percent above or below the parity rate set by the central bank, which bases the price on a weighted average of prices offered by market makers before the interbank market opens each business day.

The offshore yuan, which is not governed by the parity rate, dipped 150 basis points to 6.5256 in early trading when the rate was disclosed, marking eight straight sessions of depreciation and its longest dwindle since 2016. It hit a 2018 low during afternoon trading and stood at 6.5400 as of 4.15 p.m. Beijing time.

The persistent rise in the dollar is causing the yuan to lose ground, according to the central bank’s financial magazine. China’s economic fundamentals still provide full support for the yuan’s exchange rate, which is expected to remain moderately stable given demand and supply forecasts, it added.

Editor: James Boynton