The yuan closed slightly lower against the dollar on Friday as the Chinese central bank showed its determination to maintain the yuan's stability, minimising the impact of the G20 summit in Pittsburgh this week, where the United States is seeking a plan to rebalance the global economy.
The People's Bank of China set its daily yuan mid-point, or its reference rate by which the yuan can only rise or fall 0.5 percent in a day, at a lower 6.8287 against the dollar from Thursday's 6.8280. It took the dollar's slight rebound in global markets as an excuse to let the yuan fall slightly, dealers said.
Guided by the mid-point, spot yuan closed at 6.8282, down slightly from 6.8272 at the close on Thursday, brushing aside pressure to appreciate after the dollar index has dropped 15 percent versus a basket of six major world currencies dominated by the euro since March.
"The PBOC uses its deeds to prove its words," said a dealer at a major European bank in Shanghai. "It is China's currency policy, instead of the global dollar movements, that will decide the yuan's near-term trend." Dealers said they expected the yuan to move in a narrow range between 6.8250 and 6.8350 in coming weeks, if not months.
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