PBOC Sets Official Midpoint Rate of Yuan at Weakest Level Since March 2008
Arslan Butt • 1 min read
China’s central bank PBOC has fixed the official midpoint rate for its currency at 7.0879 against the US dollar on Friday. Although this is the weakest level in over 11 years, the Chinese yuan has strengthened against the dollar for a fourth consecutive day, with USD/CNH trading at 7.155 at the time of writing.
Friday’s rate was fixed 21 pips lower than that of the previous day and is the weakest guidance rate since March 2008. However, it beat economists’ forecast which was for the rate to be set at 7.1237 against the dollar, 318 pips higher.
Recent positive comments from China on proceeding with the face-to-face meetings scheduled for September should also help support the Chinese yuan during today’s trading. The Chinese government has stepped in to stem the yuan’s decline with state-owned banks receiving liquidity in the dollar in the forwards market and then selling the USD in onshore spot market.