Traders have pushed the onshore exchange rate for the yuan to its lowest level since June despite the central bank’s raising of the official rate to its highest level since March, Bloomberg reported. Traders have gained more leeway to influence the exchange rate since March, when the People’s Bank of China doubled the currency’s trading band to 2% on either side of the fixing. The 1% discount between the market and central bank rates is a turnaround from the first four months of the year, when weaker fixings by the PBoC prompted speculators to reverse bets on yuan appreciation and sent the spot rate lower.
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