Yuan Falls to Lowest Point Against Dollar in Over Three Months
(Yicai Global) May 2 -- The Chinese yuan’s central parity rate against the dollar fell by 277 basis points to 6.367 today, hitting its lowest point since Jan. 25.
The fall followed a decline on the last trading day before the three-day-long Labor Day Holiday. The yuan closed at 6.3439 and 6.331 against the dollar on the onshore and offshore markets, respectively, on 26 April, representing a one-month trough.
The yuan’s recent corrections against the greenback sparked intense discussions about China’s monetary policy throughout the world, state-run People’s Daily said. The Chinese government has adopted a consistent and neutral monetary policy in recent years, one analyst said, adding that the macroeconomy has recovered steadily amid an uptick in activity among microeconomic entities and sustained improvement in the quality of organic economic growth.
The yuan has also become increasingly internationalized driven by the increased competitiveness of Chinese products and the country’s deepening integration into the global economy, the analyst added. China does not plan or need to devalue its currency to boost its competitiveness on export markets, despite the escalating trade frictions with the US. The yuan’s exchange rates will remain stable and fluctuate in both directions within a reasonable range, he concluded.
Editor: William Clegg