Chinese yuan weakens to 6.5277 against USD Tuesday after 11 day increase

Updated 2017-09-12 14:30:17 Xinhua

The central parity rate of the Chinese currency, the yuan, weakened against the U.S. dollar Tuesday after a relaxation of controls on capital outflows.

The central parity rate of the yuan weakened 280 basis points to 6.5277 against the U.S. dollar, ending a record 11-day rise, according to the China Foreign Exchange Trade System.

In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

The dollar index, which tracks the greenback against a basket of six major currencies, was 0.66 percent higher at 91.957 on Tuesday.

Starting Monday, China's central bank scrapped reserve requirements of 20 percent for financial institutions settling foreign exchange forward yuan positions.

Meanwhile, the central bank's substantial supervision of reserves put aside by foreign financial institutions was also loosened.

The adjustment was made as the current market environment has changed significantly, which means counter-cyclical macro-prudential policies have given way to neutral monetary policy, said Sun Guofeng, head of the financial research institute affiliated to People's Bank of China.

The move will make it cheaper for companies and investors to buy dollars while selling the yuan, and thereby help ease the pace of the Chinese currency's recent rally, according to Lianxun Securities.

China is pursuing a prudent and neutral monetary policy in 2017, applying a full range of policy instruments to maintain basic stability in liquidity and hold interest rates at an appropriate level.

The correction of the yuan, however, does not necessarily mean its rising trend has been reversed, rather that the yuan-dollar exchange rate will probably achieve two-way fluctuations with improving flexibility, said Ying Xiwen, senior researcher of China Minsheng Bank.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58October 21 2017 01:49:51

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16October 21 2017 01:49:51

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18October 21 2017 01:49:51

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

Most Watched

News:
China World Business Sports Showbiz Audio
Video:
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
Photos:
China World Fun Travel Entertainment Sports
Travel:
Beijing Shanghai Guangzhou
Lifestyle:
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords