Yuan Is Firmer Against Dollar, With Onshore and Offshore Rates Edging Closer to 6.54
Liao Shumin
/SOURCE : Yicai
Yuan Is Firmer Against Dollar, With Onshore and Offshore Rates Edging Closer to 6.54

(Yicai Global) Sept. 4 -- China's currency, the yuan, maintained the strong trend of appreciation against the dollar today. The spot exchange rate of the yuan against the dollar declined, closer to the threshold of 6.54 both in the Chinese mainland market and Hong Kong.

The offshore exchange rate (USD/CNH) touched 6.5394, and the onshore exchange rate (USD/CNY) declined to 6.5404 by 14.30 p.m. today.

PBOC, China's central bank, set the yuan central parity rate against the dollar at 6.5668 on Monday, declining 241 basis points. The yuan has appreciated by 5.9 percent against the dollar since the beginning of the year, although it depreciated by 0.6 percent against a basket of currencies weighted by trade. The yuan's appreciation against the dollar has accelerated in recent weeks.

If the market's pessimistic expectation on the direction of the exchange rate of the yuan as well as foreign exchange outflows changes, the government might relax capital controls including "temporary" initiatives like the restrictions over ordinary people's demand for foreign currency implemented since the end of 2015, said a macroeconomic analysis by China International Capital Corporation (CICC) [HKG:3908], an investment banking firm.

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Keywords: Spot Exchange Rate , Yuan , US Dollar , Onshore , Offshore