SHANGHAI — China’s yuan firmed against
the dollar on Wednesday, aided by faster-than-expected credit
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growth in September, the central bank’s vow to curb any big
currency swings, and a steady midpoint fixing for the currency.
On the whole, however, the yuan’s upside was contained
by a buoyant dollar, global recession risks, and Beijing’s
continued zero-COVID commitment amid fresh outbreaks.
The onshore yuan was changing hands at 7.1671 at
midday, a tad stronger than the previous late session close,
after the People’s Bank of China set the midpoint rate
at 7.1103 per dollar, little changed from the
“The steady CNY fixing … should help anchor RMB
expectation and prevent the one-way RMB movement,” Mizuho Bank
strategist Ken Cheung wrote in a client note.
Sentiment was also aided by data showing new bank lending in
China nearly doubled in September from the previous month, far
Late on Tuesday, PBOC said it will take steps to stabilize
expectations, and keep the yuan basically stable, vowing to
“resolutely curb big ups and downs in exchange rates.”
The dollar index rose to near two-week highs of
113.59 on Wednesday.
But pressure on the yuan remains.
China will persist with its COVID-19 policies to avoid
losing control over local coronavirus outbreaks, the official
newspaper of the ruling Communist Party warned in a commentary
for the third straight day.
The International Monetary Fund on Tuesday cut its 2022 and
2023 economic growth forecasts for China to 3.2% and 4.4%,
respectively, saying the frequent lockdowns under the country’s
zero-COVID policy have taken a toll on its economy.
“China’s growth recovery is still facing headwinds from
COVID-19 uncertainty, a sluggish consumption recovery and signs
of slower external demand,” HSBC Greater China economist Erin
Xin wrote in a client note on Wednesday.
The yuan market at 4:46AM GMT:
Item Current Previous Change
Spot change YTD
Spot change since 2005
Item Current Previous Change
*Divergence of the dollar/yuan exchange rate. Negative number
indicates that spot yuan is trading stronger than the midpoint.
The People’s Bank of China (PBOC) allows the exchange rate to
rise or fall 2 percent from official midpoint rate it sets each
OFFSHORE CNH MARKET
Instrument Current Difference
Offshore spot yuan
non-deliverable 7.048 0.88%
*Premium for offshore spot over onshore
**Figure reflects difference from PBOC’s official midpoint,
since non-deliverable forwards are settled against the midpoint.
(Reporting by Samuel Shen and Shanghai newsroom
Editing by Shri Navaratnam)