Renminbi weakens to 6.5207 against dollar

The central parity rate of the Chinese currency, the renminbi or the yuan, weakened by 239 basis points to 6.5207 against the US dollar on Wednesday, the lowest point in about two weeks. The softer rate came after drops in the offshore yuan against the dollar on Tuesday, following rumors that the country’s central bank had notified lenders to suspend the “counter-cyclical factor” in the pricing mechanism of the yuan’s central parity rate. The People’s Bank of China said in response that parameters of the counter-cyclical factor are determined by market-making banks based on their own judgment on the macroeconomy and the foreignexchange market.