PBOC cut yuan’s fixing to weakest since Aug 2020, yuan approaches 7 per dollar mark
FOREX
PBOC cut yuan’s fixing to weakest since Aug 2020, yuan approaches 7 per dollar mark
FOREX

PBOC cut yuan’s fixing to weakest since Aug 2020, yuan approaches 7 per dollar mark

 

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The People’s Bank of China cut the yuan’s fixing by 64 pips 6.9160 per US dollar on Wednesday, the weakest level since August 2020, compared to a fixing of 6.9096 one day earlier.

The offshore Chinese yuan broke through 6.98 per US dollar mark Wednesday morning, HK time, and hit 6.9833 at one point, the weakest level since August 2020 and approaching the psychologically important 7 per dollar mark.

The onshore yuan weakens more than 200 pips shortly after market open on Wednesday to break through 6.97 per dollar mark, hitting 6.9712 at one point. The US dollar surges by 0.21% to trade at 110.4833 at 9:51 am, HK time.

Notably, the central bank on Monday announced a cut to reserve requirement for financial institutions’ foreign exchange deposits by 2 percentage points in a move to curb the yuan’s weakness, after the currency weakened more than 2.8% agains the US dollar in three weeks to hit the weakest level in two years. Read more …

Separately, the PBOC injects 2 billion yuan liquidity to the banking system via 7-day reverse repo on Wednesday, while 2 billion yuan reverse repo expires, leaving a net zero injection.