New | Offshore yuan drops to six-year low even as central banker sought to sooth market’s concerns
“There’s no basis for the yuan’s continued depreciation,” the PBOC’s deputy governor Yi Gang wrote in an Op-Ed on Tuesday in the People’s Daily newspaper
Offshore yuan dropped to a record low on signs that capital was leaving China in greater amounts and at a faster rate, even as a deputy central banker sought to calm the currency markets through a government mouthpiece newspaper.
The yuan traded at 6.7816 per dollar at 5.30 pm in the offshore market in Hong Kong on Tuesday, after touching a low of 6.7880 overnight, the weakest intraday level since trading started in 2010. Onshore yuan was transacted at 6.7760 in Shanghai, also the lowest level in six years.
The offshore yuan rate has been touching record lows for three consecutive days, after Chinese policymakers set successively lower reference points to signal their willingness to allow for greater flexibility in the renminbi’s movement, amid an exports decline and an advance in the US dollar.
The People’s Bank of China set its daily reference rate of the yuan at 6.7744 against the dollar on Tuesday, 54 basis points lower than Monday and breaking the critical psychological point of 6.7700.
The index for the yuan’s value based on the market’s trade-weighted basket stood at 94.30 last Friday, down 0.4 per cent from the previous week, according to China Foreign Exchange Trade System’s data.
To stem the currency’s slide, the Chinese central bank’s deputy governor Yi Gang wrote a commentary in his name, published Tuesday in the People’s Daily, the government’s mouthpiece newspaper.