The yuan ended almost flat against the dollar on Tuesday after the Chinese central bank fixed a lower mid-point, with demand for the US dollar limited ahead of the National Day holidays, dealers said. The People's Bank of China set the daily yuan mid-point, or its reference rate, at a slightly weaker 6.8288 against the dollar from Monday's 6.8279.
That guided spot yuan to close at 6.8280, only marginally lower from Monday's close of 6.8275. "The market's demand for dollars is limited before the National Day holiday and the dollar has become more stable these days, so the yuan will still trade in a narrow range," said a dealer at an Asian bank in Shanghai. The domestic market, the China Foreign Exchange Trade System, will be closed for eight days from October 1, to mark 60 years of Communist rule.
The Chinese central bank traditionally does not change its currency policy around long holidays. In late afternoon, the PBOC said in a report that it would stick to an appropriately easy monetary policy to support an economy that it said was still suffering from weak external demand and was not yet on a solid footing.