China central bank fixes yuan mid-point at weakest in more than 4 years

The People's Bank of China set its official midpoint rate at 6.4358 per dollar prior to the market open on Friday, its weakest level since Aug 5, 2011, and 0.2 per cent weaker than the previous fix of 6.4236. 

PHOTO: BLOOMBERG

DEC 11, 20159:37 AM

[SHANGHAI] The People's Bank of China set its official midpoint rate at 6.4358 per dollar prior to the market open on Friday, its weakest level since Aug 5, 2011, and 0.2 per cent weaker than the previous fix of 6.4236.

Guided by the PBOC's official guidance rate, spot yuan has hit multi-month lows each day this week in intraday trading, raising questions about how much the central bank intends to let it depreciate.

The spot rate is allowed to trade within a range 2 per cent above or below the official fixing on any given day.

Last week, the International Monetary Fund announced that it would include the yuan in its Special Drawing Rights (SDR) basket alongside the dollar, euro, pound sterling and yen, an important milestone in China's integration into global finances.

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Markets have been rife with speculation that Beijing would allow the yuan to depreciate after the SDR inclusion. The yuan's performance this week appears to justify that speculation, traders said.

REUTERS