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China’s central bank, the PBOC, warns against speculation in the yuan

The Chinese yuan weakened past the closely watched 7.2 level against the dollar this week.

Getty Images

BEIJING — People’s Bank of China warned against betting on yuanfollowing its sharp decline against the US dollar this week.

“Do not bet on a one-sided appreciation or depreciation of the yuan exchange rate,” the central bank said in a statement. Chinese statement on its website late Wednesday, according to a translation by CNBC.

This follows Vice Governor Liu Guoqiang’s speech at a foreign exchange video conference that day.

Yuan, or yuan, exceeded the level of 7.2 against the dollar Wednesday, falling to the weakest since 2008 US dollar indexwhich tracks the dollar against major global currencies, rose to a two-decade high as the US Federal Reserve raised interest rates aggressively this year.

The NBK’s statement requiring banks to maintain stability in the foreign exchange market is “verbal guidance against the recent rapid depreciation of the currency,” Goldman Sachs analyst Maggie Wei and his team said in a note.

We are not very surprised by the fall of the Chinese yuan, says Nomura

However, the yuan crossing the 7.2 mark “suggests that Chinese policymakers are not necessarily defending a certain level of the exchange rate,” the report said. “PBOC Statement May Slow Pace of CNY Depreciation on Margin”.

The onshore yuan weakened 1.9% against the dollar this week, according to Wind Information.

China’s central bank has taken other steps to support the yuan this month, including reducing the amount of foreign currency that banks need to keep.

Learn more about China from CNBC Pro

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China’s central bank, the PBOC, warns against speculation in the yuan

The Chinese yuan weakened past the closely watched 7.2 level against the dollar this week.

Getty Images

BEIJING — People’s Bank of China warned against betting on yuanfollowing its sharp decline against the US dollar this week.

“Do not bet on a one-sided appreciation or depreciation of the yuan exchange rate,” the central bank said in a statement. Chinese statement on its website late Wednesday, according to a translation by CNBC.

This follows Vice Governor Liu Guoqiang’s speech at a foreign exchange video conference that day.

Yuan, or yuan, exceeded the level of 7.2 against the dollar Wednesday, falling to the weakest since 2008 US dollar indexwhich tracks the dollar against major global currencies, rose to a two-decade high as the US Federal Reserve raised interest rates aggressively this year.

The NBK’s statement requiring banks to maintain stability in the foreign exchange market is “verbal guidance against the recent rapid depreciation of the currency,” Goldman Sachs analyst Maggie Wei and his team said in a note.

We are not very surprised by the fall of the Chinese yuan, says Nomura

However, the yuan crossing the 7.2 mark “suggests that Chinese policymakers are not necessarily defending a certain level of the exchange rate,” the report said. “PBOC Statement May Slow Pace of CNY Depreciation on Margin”.

The onshore yuan weakened 1.9% against the dollar this week, according to Wind Information.

China’s central bank has taken other steps to support the yuan this month, including reducing the amount of foreign currency that banks need to keep.

Learn more about China from CNBC Pro

Reported by Source link

RELATED ARTICLES
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Most Popular