China maintained the court’s grip on the yuan through the daily reference price, as it threatened the sudden increase in the dollar through the confusion of the investor moral to the managed currency and its Asian counterparts. The Chinese People’s Bank determined the reference price at 7.1887 against the dollar, which is 1528 foundations compared to the average estimates in a ‘Bloomberg’ recording of the opinions of traders and analysts. The larger gap, which has reached its biggest level since April Wednesday, shows the intention of policy makers to avoid sharp declines in the yuan. The move came with the progress of the dollar, due to the high returns of US bonds and strong economic data in the United States, which the Yuan in foreign markets asked to approach its worst levels ever. Asian currencies, including Korean Won, Thai and the Philippine Bezo. Alvin T. said. Tan, RBC Capital Markets: “It seems that the Chinese People’s Bank is determined to support the Yuan.” He added that the central bank helps the currency “not only by installing it in the local market, but also through very high financing prices in the foreign market.” The Yuan almost set in foreign markets at the 7.34 level level against the dollar after the reference price was determined. A balance between Yuan support and growth has always tried to find a balance between financial facilitation to support Yuan growth and support to avoid large capital flow. However, the major difference in interest rates compared to the United States, threats associated with increased customs duties, and locally economic recovery, is despite the support of the People’s Bank. The central bank used the price installation mechanism, which limits the Yuan movements in the local market by 2% up or down, to stop the currency losses. The increase in the cost of borrowing the Yuan in Hong Kong this week also reflects expectations that the People’s Bank will use other instruments to combat negative bets by reducing the liquidity in the external market. In a clear indication of government concerns, the central bank promised in a statement of the recent separate monetary policy meeting to confront behavior that shakes the market stability and the build -up of mono -directional betting or any violation of the exchange rate. Local media reported on Monday that the People’s Bank is planning to increase the Hong Kong Securities Auctions. “We still see the positive risks of the dollar Yuan and it is possible that it is a matter of time before the Chinese bank is forced to increase the daily reference price installation operations,” said Wei Khund Chung, the main market strategy at Bny Bank.
China increases the support of the yuan in light of the US dollar’s rise
