(Yicai Global) June 21 -- The onshore yuan weakened to its lowest in more than five months because of a strong US dollar and after China's central bank unexpectedly added money into the financial system earlier this week.

The onshore yuan fell to 6.50 against the US dollar this afternoon, the first time since Jan. 11, after a drop of 250 basis points from yesterday's close. Offshore, the redback weakened more than 300 basis points to 6.51, plumbing levels not seen since Jan. 11.

The yuan's central parity rate against the dollar slid 120 basis points from the previous day to 6.4706 today, according to data published by the China Foreign Exchange Trading Center. In China's spot forex market, the currency is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The Chinese currency's poor performance is partly due to the US dollar hitting an 11-month high on the back of higher US bond yields as panic over a China-US trade tiff showed signs of easing. June and July traditionally make up the peak season for dollar demand as foreign companies repatriate profits and Chinese firm pay dividends to overseas investors.

China's export surplus is expected to narrow, which has brought some pressure to bear on the exchange rate, China Securities Journal reported. It suggested that supply and demand in the currency markets is still stable and that China's economic growth is resilient, so the weakened yuan should not cause any long-term concern.

The People's Bank of China, the country's monetary authority, lent CNY200 billion (USD31 billion) to financial institutions through its medium-term lending facility and pumped CNY100 billion into the market through reverse repurchases on June 19. The move came hours after US President Donald Trump threatened to slap more tariffs on Chinese imports.

Editor: Emmi Laine