(Yicai Global) Sept. 12 -- The central parity rate of the yuan against the US dollar dropped 280 basis points before today's interbank market opening in the biggest decline since Feb. 20, ending the 11th straight day that the central parity rate appreciated, the longest streak since 2005.
The China Foreign Exchange Trade System (CFETS), the interbank trading and foreign exchange division of China's central bank, the People's Bank of China (PBOC), set the yuan central parity rate at 6.5277 against the dollar, compared with the official close of 6.5239 yesterday.
The onshore spot exchange rates of the yuan against the dollar fell to the highest levels of 6.5239, and dipped further to 6.5260 at the close of night trading yesterday. The offshore spot exchange rates of the yuan against the dollar also fell to close at 6.5376.
The dollar index thawed 0.015 points to 91.938 at 9.22 a.m.
PBOC canceled reserve deposits that overseas yuan business participating banks saved in domestic agency banks from today and lowered the foreign exchange risk reserve ratio from 20 to 0 percent. Analysts ascribed this to PBOC's unwillingness to allow yuan to appreciate too fast.
The move sought to stifle continued yuan appreciation and dampen corresponding expectations. The currency's robust showing last month took a bite out of exports, analysts opined.