Chinese Yuan Falls To 1-1/2-year Low Against U.S. Dollar After Rule Change
October 11 2020 - 10:59PM
RTTF2
The Chinese yuan depreciated against the U.S. dollar in the
Asian session on Monday, after the People's Bank of China announced
that financial firms' need not set aside cash when buying foreign
currency for forward settlement.
Financial institutions should hold a 20 percent reserve when
conducting some foreign exchange forwards trading before the rule
change.
The move is likely to keep the yuan's strength in check.
The yuan dropped to 6.7268 against the greenback, its lowest
level since April 2019. The yuan is likely to locate support around
the 6.9 level.
The People's Bank of China set today's central parity rate of
the yuan at 6.7126 per dollar, compared to Friday's rate of 6.7796.
The Chinese central bank sets central parity rate every morning and
allows the yuan to fluctuate up to 2 percent from that level.
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