Bank of China cuts reference rate as yuan falls

Posted On: December 18, 2014

The yuan fell 0.3 percent Thursday in Hong Kong's offshore market to 6.2184 per U.S. dollar, Bloomberg reported. The China Foreign Exchange Trade System indicated that the onshore yuan fell 0.3 percent to 6.2163 after falling earlier in the trading session to 6.2215, marking its lowest rate since June 27.

The People's Bank of China reduced the currency's reference to 6.1195 per U.S. dollar, which was its highest rate since Nov. 6. Twelve-month non-deliverable forwards fell 0.5 percent to 6.3465 per U.S. dollar.

"The [Federal Open Market Committee] plays well into further dollar strength, possibly into next year," Irene Cheung, a currency strategist with Australia & New Zealand Banking Group Ltd. in Singapore, told the publication. "But I think there's still a preference for the yuan to remain fairly stable, and that's reflected in the fixing."

The Australian Business Review reported that Hong Kong stocks increased 1.09 percent on Thursday after the U.S. Federal Reserve indicated that interest rates will likely not increase until the middle of 2015. The Hang Seng Index ended a five-day dip by gaining 246.37 points on Thursday to 22,832.21. However, the Shanghai Composite Index in mainland China fell 0.11 percent to 3,057.52 after a four-day upswing.

Category: Industry News

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