PBOC Sets Highest Yuan Rate in Almost Nine Months
Xu Wei
/SOURCE : Yicai
PBOC Sets Highest Yuan Rate in Almost Nine Months

(Yicai Global) July 5 -- China's central bank today fixed the yuan's central parity rate against US dollar at its highest rate in nearly nine months to halt the currency's slide after the redback suffered its worst month on record in June.

The People's Bank of China set the midpoint at 6.6180. In China's spot forex market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The onshore yuan ended trading slightly weaker at 6.6372 per dollar after climbing in the morning. The offshore rate fell to 6.6381 at 7.09 p.m. Beijing time.

The yuan's devaluation against the dollar is influenced by certain fundamental factors, leading to a normal market reaction, and may also be affected by market expectations, Sheng Songcheng, counselor at the People's Bank of China, wrote in an article published in state-backed Economic Daily. 

"We should not interpret the yuan's devaluation excessively, let alone believe that it is a result made by PBOC," Sheng said. "China's monetary policy is relatively independent, and a prudent and neutral monetary policy is still upheld. On this basis, the use of monetary policy regulation functions to guide liquidity and support weak areas is also in line with the requirements of supply-side structural reform."

The yuan lost 3.3 percent against the dollar in June, its worst monthly performance on record.

Editor: Emmi Laine

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Keywords: CNY , USD , Forex , Yuan , Pboc , Central Parity Rate