China's yuan posts big­gest weekly loss on record

The Pak Banker - - BUSINESS -

China's yuan held steady against the dol­lar on Fri­day, but posted its big­gest weekly loss on record due to the cen­tral bank's sur­prise move to de­value its cur­rency.

The Peo­ple's Bank of China (PBOC) set the mid­point rate (CNY=SAEC) at 6.3975 per dol­lar prior to mar­ket open, firmer than the pre­vi­ous day's clos­ing quote 6.399. The spot mar­ket (CNY=CFXS) closed at 6.3918 per dol­lar, 72 pips away from the pre­vi­ous close and 0.09 per­cent away from the mid­point. The yuan fell by 2.9 per­cent for the week. The yuan fell for three con­sec­u­tive days and had re­peat­edly touched fresh four-year lows since Tues­day, when the PBOC sur­prised the mar­ket by de­valu­ing the yuan by nearly 2 per­cent.

"We be­lieve that yuan may reach new equi­lib­rium at around 6.4-6.5 lev­els, but short term volatil­ity may re­main higher," said Suan­jin Tan, a port­fo­lio man­ager at Black­Rock. Some banks re­vised down their forecast for the yuan to reach 6.5-6.6 by the end of the year.

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