SHANGHAI: China’s yuan held steady against the dollar on Tuesday after the government set an economic growth target of 5% for 2024, as expected, and investors awaited more policy details from this week’s annual parliament session.
Reactions in the yuan have been muted, while yields on China’s 10-year government bonds dropped more than 1 basis point after the release.
The National People’s Congress (NPC), kicked off its annual session on Tuesday, with plans to contain the 2024 fiscal budget deficit at 3% of gross domestic product (GDP).
“If the GDP target is left unchanged at around 5%, it could support equity inflows and the yuan as such a target would require more stimulus,” said Chang Wei Liang, FX and credit strategist at DBS. Still, traders and investors are awaiting more policy details during the annual session.
Prior to the market’s opening, the People’s Bank of China set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1027 per US dollar, 7 pips weaker than the previous fix 7.102.
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