Middle Rate of CNY Rapidly Declined 441 Points on Monday
Yicai Global
/SOURCE : Yicai
Middle Rate of CNY Rapidly Declined 441 Points on Monday

(Yicai Global) Aug. 23 -- On Monday the middle rate of CNY against USD declined 441 points, or 0.67 percent, the lowest since July 27. The present rate of CNY6.6652 marks a dubious new record for the most rapid decrease for almost a month, according to China's Foreign Exchange Trade System.

US Federal Reserve (FED) officials have taken an increasingly firm stand on an interest rate hike within the year to promote the USD index, and last Friday's middle rate had a great deviation to its closing price, which also lowered Monday's middle rate, market analysts said.

Then, last Friday, the middle rate of CNY against USD increased by 62 points or 0.09 percent, declared as CNY 6.6211, while the closing rate was CNY6.6546.

The Federal Reserve disagreed on whether they should increase the interest rate, according to the minutes of the monetary policy meeting in July. FED Vice Chair Stanley Fischer tried to build up expectations of a rate hike increase this year, saying that the US central bank was within striking distance of its inflation target. However, other officials were more circumspect, and pinned any rate increase to September at least.

Janet Yellen the Chair of FED is scheduled this Friday to give keynote a speech in the annual Jackson Hole meeting in Wyoming of global central banks.

The market will pay acute attention to the information disclosed by the speech, with investors keen to see if the Reserve takes a proactive approach and cease delaying a rate increase. Yellen's speech is expected to have an effect on the middle and exchange rates of the CNY, market participants said.

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