Yuan falls to a record low despite PBOC measures
The yuan tumbled against a rising US dollar in early deals on Wednesday, with its offshore trades dropping to a record low, pressured by expectations of more Federal Reserve rate hikes. China's offshore yuan fell as far as 7.2349, the lowest level since such data became available in 2011. It was trading at 7.2286 per dollar by mid morning. Its onshore counterpart followed suit and fell to a low of 7.2302 against the dollar in early trade, the weakest since the global financial crisis in 2008. Its rate at the previous late night close was 7.18. "Non-dollar currencies all crashed in early trades, the yuan can't escape," said a trader at a foreign bank. Several currency traders also said corporate dollar buying was very strong on Wednesday, piling additional pressure on the yuan. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 7.1107 per dollar, 385 pips or 0.54% weaker than the previous fix of 7.0722. The declines come despite China's central bank announcing fresh steps on Monday to slow the pace of the yuan's recent fall by making it more expensive to bet against the currency. Earlier this month, the PBOC also cut the amount of foreign exchange reserves that financial institutions must hold in a move also seen as aimed at slowing the yuan's depreciation. Efforts by authorities to stem yuan weakness was having a limited impact, said a second trader at a Chinese bank. (Reuters)