The renminbi saw its largest weekly decline in 20 months on Friday following speculation that the currency is being held back due to a government desire to protect exports, Bloomberg reported. The People’s Bank of China set the daily reference rate for currency trading at RMB6.8035 to the US dollar, 0.27 percent lower than Thursday’s close of 6.7851. The Dollar Index, which tracks China’s currency against its six major trading partners, rose 2.6% last week, its biggest gain since May 7, as investors responded to talk of global economic uncertainty by buying dollars. Currency traders also downgraded their appreciation expectations after growth in exports, industrial output and bank lending all slowed in July. Non-deliverable forwards declined 0.09% for the week, reflecting bets the currency will gain 1.6% in a year from the spot rate.
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