China’s yuan performing much better than most other currencies – SAFE
SHANGHAI — The performance of the Chinese yuan was much better than most other currencies over the past year, the state broadcaster CCTV cited the country’s foreign exchange regulator as saying on Friday.
A buoyant dollar and higher market expectations for more aggressive Federal Reserve tightening have pressured most non-dollar currencies.
The yuan has lost nearly 10% of its value versus the dollar so far this year, while against major trading partners it stood at 102.09 on Friday, down only about 0.4% year-to-date.
“The yuan performed much better than most developed market and emerging market currencies,” CCTV quoted Ding Zhijie, head of the State Administration of Foreign Exchange’s (SAFE) research center.
“Our yuan exchange rate, whether speaking from the supply and demand in the FX market, or from the currency level and the trend, is basically maintaining a stable state.”
In a separate commentary published on the state-owned Shanghai Securities News on Friday, the newspaper also urged the market to keep “a peaceful mind” in reacting to higher yuan volatilities.
“The uncertainty around global economic situations have increased in recent years, it has become the norm for the yuan exchange rate to have higher fluctuations,” the state media said.
Some currency traders viewed such state media commentaries and official remarks as part of the efforts to stabilize the yuan following sharp movements.
The yuan traded onshore and offshore, weakened past the psychologically important 7 per dollar this week.
The People’s Bank of China has been setting firmer-than-expected official guidance rates over the past two weeks to rein excess yuan losses. It has also lowered the amount of foreign exchange banks must hold as reserves to slow the yuan’s falls.
(Reporting by Winni Zhou and Brenda Goh Editing by Shri Navaratnam)