LOC12:33
09:33 GMT
TOKYO, Oct 24 (KUNA) -- The Chinese yuan weakened against the US dollar to a fresh six-year low on Monday against at the lowest level in more than six years.
The People's Bank of China set the central parity rate, an official reference for daily trading, at CNY 6.7690 per dollar, down by 132 basis points from Friday's setting, according to the China Foreign Exchange Trading System. The mid-point rate was the weakest since September 2010.
In China's spot foreign exchange market, the central bank strictly controls trading of the yuan. It fixes the daily official rate every morning and allows the currency to rise or fall up to 2.0 percent from the rate.
The yuanآ’s fall comes as increased market expectations for an interest rate hike in the US led to a stronger dollar, state-run Xinhua News Agency reported. "The recent yuan depreciation can be attributed to a stronger dollar," State Administration of Foreign Exchange Spokesman Wang Chunying was quoted as saying at a press conference in Beijing on Friday.
Wang said that China's exchange rate mechanism has become more market-oriented and transparent which led to higher volatility for the yuan.
Analysts believed despite short-term volatility from a stronger dollar, the yuan will maintain overall stability and the chance for a sharp depreciation is slim, backed by stable economic growth, balanced fiscal condition and ample foreign exchange reserves, according to Xinhua. (end)
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