Yuan Little Changed as Government Favors a Stable Currency
The yuan was little changed on speculation China is keeping the currency’s appreciation in check to help exporters weather a global economic slump.
China will raise export rebates on a range of products including textiles, toys and medicines next month, according to a statement posted on the Web site of the Ministry of Finance yesterday. The People’s Bank of China has halted the currency’s gains since mid-July to help exporters cope with flagging sales.
“To keep the exchange rate stable is the best choice now,” said Yang Shengkun, a currency analyst in Beijing at China Citic Bank Co., a unit of China’s biggest state investment company. “China’s export growth will definitely slow down, but you can’t let the yuan depreciate as it may trigger excessive capital outflows.”
The yuan traded at 6.8362 a dollar as of 10:16 a.m. in Shanghai, from 6.8337 yesterday, according to the China Foreign Exchange Trade System. The currency has risen 0.3 percent since the end of June after strengthening 6.6 percent in the first six months of the year.
The reference rate for yuan trading, fixed by the central bank every day to guide the market, has moved about 0.1 percent in the past week. The yuan is allowed to trade by up to 0.5 percent against the dollar either side of the reference rate, which was set at 6.8339 today, compared with 6.8272 a week ago.
Tags: central-bank, China Investment
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