(Yicai Global) Sept. 8 -- The central parity rate of the yuan (CNY) against the US dollar (USD) declined 237 basis points before the opening of the interbank market on Friday. It is the 10th consecutive day that the central parity rate appreciated, the longest streak since 2011.
The China Foreign Exchange Trade System (CFETS), the interbank trading and foreign exchange division of China's central bank, the People's Bank of China (PBOC), set the yuan central parity rate at 6.5032 against the dollar, compared with the official close of 6.4972 yesterday.
The onshore and offshore spot exchange rates of the yuan against the dollar fell to the lowest levels of 6.4819 and 6.4775, but recovered to 6.4829 and 6.4866 at the close of night trading.
The spot exchange rate of the yuan against the dollar broke the 6.50, 6.49, and 6.48 thresholds yesterday.
This round of the yuan's appreciation exceeds the expectations of most financial institutions, the 21st Century Business Herald reported. The yuan's current rally causes a dilemma for trading enterprises and hedge funds regarding their hedging strategy. On one hand, enterprises can try to take advantage of the bargain-hunting opportunities the dollar's depreciation offers, while worrying about the yuan's continued appreciation. The hedge funds, on the other, can try to bet on the yuan's eventual depreciation, but worry about possible intervention from PBOC, China's central bank, the report said, citing the executives of enterprises and hedge funds.