ZCZC
BCN-23
CHINA-YUAN-FOREX
Chinese yuan weakens in July
BEIJING, Aug. 4, 2018 (BSS/Xinhua) – China’s yuan weakened more than 3
percent against a basket of currencies in July, according to a China Foreign
Exchange Trade System (CFETS) index.
The CFETS RMB Index, which measures the yuan’s strength relative to a
basket of currencies, came in at 92.41 at the end of July, a 3.4 percent
decline from a month ago, CFETS said.
The index compares the yuan to the value of 24 currencies, including the
U.S. dollar, euro and Japanese yen, which was expanded from a basket of 13
currencies in 2016.
In July, an index that measures the yuan against the Bank for
International Settlements currency basket went down 3.36 percent to 95.67,
while against the Special Drawing Rights basket it weakened 3.33 percent to
92.7, according to CFETS.
China’s central bank announced Friday that it would raise the reserve
requirement ratio from zero to 20 percent for financial institutions trading
foreign exchange forward contracts from Monday.
As part of the macro-prudential policy framework, the move is a response
to recent pro-cyclical fluctuations in the forex market and aims to forestall
macro-financial risk, the People’s Bank of China said.
The central bank said it would “enhance monitoring and make counter-
cyclical adjustments in accordance with the development of the situation to
keep the forex market steady and the yuan’s exchange rate basically stable at
a reasonable and balanced level.”
BSS/XINHUA/HR/1330