SHANGHAI: China's yuan weakened at open on Thursday after the central bank set the midpoint at a more than 4-year low for the second day, a sign Beijing is quietly permitting the currency to depreciate after it was included in the IMF's reserve basket.
The People's Bank of China set the midpoint rate at 6.4236 per dollar prior to market open, 0.1 percent weaker than the previous fix of 6.4140.
Guided by the midpoint, the spot market opened at 6.4300 per dollar, its weakest open since Aug. 12, and was changing hands at 6.4310 in early trade, 30 pips weaker than the previous close.
The offshore yuan was trading 1.03 percent weaker than the onshore spot at 6.498 per dollar.
Last week, the International Monetary Fund announced that it would include the yuan in its Special Drawing Rights (SDR) basket, an important milestone in China's integration into global finance.
Markets have been rife with speculation that Beijing would allow the yuan to depreciate after the SDR inclusion.
The yuan's performance this week appears to justify that speculation, traders said.
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