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Celia Chen

China’s yuan traded slightly weaker on Monday morning, ahead of its inclusion in the International Monetary Fund’s Special Drawing Rights (SDR) next month.
Offshore yuan in Hong Kong traded at 6.6833 to the US dollar at 11.15 am, 0.07 per cent or 48 points down from Friday.
Onshore yuan in Shanghai traded at 6.6703 to the US dollar at 11.15 am, 0.02 per cent, or 13 points weaker than on Friday.
The People’s Bank of China on Monday set the yuan reference point against the US dollar at 6.6744, down 74 basis points or 0.11 per cent from last Friday. Traders are allowed to trade up to 2 per cent either side of the reference point for the day.
The IMF admitted the yuan into its benchmark reserve currency basket last year, having determined that it met the two conditions needed - being widely used and “freely useable”. The move was seen as a major victory for Beijing as it strives to be recognised as a global economic power.
The yuan will join the US dollar, euro, yen and British pound in the IMF basket of currencies on October 1.
“Yuan trade is stuck in a rut as traders are decidedly sitting on their hands ahead of the yuan’s inclusion into SDR on October 1st,” said Stephen Innes, senior trader at Oanda. “The yuan’s inclusion in the SDR should increase demand for the currency from foreign central banks and sovereign funds, which should help counter a generally bearish yuan trend in the short term.
“The market continues to run mixed after the US Fed decided to stick their head in the sand and hope for the best come December. The Fed move tempered the decidedly hawkish yuan tack.”
In other currency trading, the British pound was also weaker, trading at US$1.2977 on Monday morning while the euro weakened 0.05 per cent to US$1.1229.


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Yuan

Yuan weakens ahead of entry into IMF’s Special Drawing Rights basket

The yuan will join the US dollar, euro, yen and British pound in the IMF’s Special Drawing Rights basket on October 1. Photo: AFP

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