Yuan dips under lowest parity rate
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E-mail Shanghai Daily, July 10, 2012
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China Monday set the central parity rate of the yuan against the US dollar at the lowest in more than a month on fears over slower economic growth in China. [Photo/Xinhua] |
China Monday set the central parity rate of the yuan against the US dollar at the lowest in more than a month on fears over slower economic growth in China.
The parity rate between the two currencies was set at 6.3293 yuan per US dollar, the weakest since June 1.
The yuan closed at 6.3714 per dollar, 0.11 percent lower than on Friday. It was the lowest close since June 25.
The yuan is allowed to be traded within 1 percent on each side of the parity rate during daily trading.
The weaker parity rate was set amid a strengthening US dollar after investors became more averse to risks on concerns about a grim global economic outlook which will threaten China's economy.
Chinese Premier Wen Jiabao said over the weekend that downward pressure on the domestic economy is still "relatively large."
A Shanghai-based trader, who declined to be identified, said: "The US dollar will continue to be strong, causing other major currencies to weaken." He disclosed that more domestic clients are increasing purchases of the US dollar.
Aokang Shoes Co, China's largest private shoe maker, said it is accumulating US dollars as fluctuations in the exchange rate widen, the Economic Observer reported yesterday.
The US dollar index, measuring the currency's value against other major currencies, hit a two-year high at nearly 84 point yesterday, on talk the US will not unveil a third round of quantitative easing despite the weak employment data released last Friday.
A Fudan University report released over the weekend said the yuan has weakened 0.88 percent against the dollar in the second quarter, the largest quarterly drop since 1994.
China will unveil the gross domestic product data for the second quarter on Friday. The GDP grew an annual 8.1 percent in the first quarter, the slowest in nearly three years.
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