HONG KONG: China’s yuan was little changed near seven-month lows against the US dollar on Wednesday, as a vow by the central bank to prevent the yuan fluctuating too much partially offset weak sentiment.
China will stick to a supportive monetary policy stance and “resolutely prevent the exchange rate overshooting”, People’s Bank of China (PBOC) Governor Pan Gongsheng told the Lujiazui Forum in Shanghai on Wednesday.
Meanwhile, Zhu Hexin, head of the State Administration of Foreign Exchange (SAFE), told the same Forum that China’s forex market is resilient.
By 0340 GMT, the yuan was 0.03% lower at 7.2559 to the dollar after trading in a range of 7.2548 to 7.2564.
Prior to the market opening, the People’s Bank of China set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1159 per dollar, its weakest since Jan. 19 and 1,323 points firmer than a Reuters’ estimate.
The spot yuan opened at 7.2550 per dollar and was last trading 3 pips firmer than the previous late session close and 1.97% weaker than the midpoint.
Despite the softening dollar, disappointing Chinese economic data has been weighing on the yuan’s performance.
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