Yuan weakens against dollar for 4th straight trading day after interest cuts
2/12/2008 16:06
China's currency, the Renminbi yuan, fell for the fourth straight trading
day against the US dollar after China's central bank announced the fourth
interest rate cut since mid-September.
The yuan's central parity rate
announced by the China Foreign Exchange Trading System was 6.8527 yuan to US$1
today, compared with 6.8505 yuan yesterday.
The central parity of yuan
against the US dollar is based on a weighted average of enquired prices from all
market makers before the opening of the market in each business day.
The
central parity rate of the yuan lost 156 basis points against the US dollar
yesterday from the previous trading day, reaching a new low since July 10,
according to today's China Securities Journal.
Last week, the PBOC said it
would cut the benchmark one-year yuan lending rate to 5.58 percent from 6.66
percent and the one-year yuan deposit rate to 2.52 percent from 3.60 percent
starting Thursday.
The yuan closed at 6.8848 to the US dollar yesterday,
meeting the daily limit of 0.5 percent from today's central parity rate. It
marks the biggest loss since the yuan became unfixed from the dollar in July
2005.
Trading in the forex market is allowed to fluctuate within a band of
0.5 percent on either side of the midpoint.
Ou Minggang, Director of the
International Finance Research Center under China Foreign Affairs University,
attributed the recent depreciation to the interest cut, adding that to some
extent this would facilitate the country's slowing exports.
The world's
fastest growing economy saw its export expansion pace in the first three
quarters slowed by 4.8 percentage points year-on-year, growing by 22.3 percent
to US$1.07 trillion.
Xinhua
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