Currency News: China Raises Yuan Reference Rate by the Largest Percentage in a Decade

Currency News

China has recently raised Yuan’s reference rate by 0.54% to 6.3154 against the U.S. dollar, which is the largest boost in the decade. Many analysts considered this move to be a result of improved attitudes towards the second largest economy in addition to upcoming decision by IMF whether to include the currency on its list of special drawing rights currency basket.

Currency News


Liu Jian, an analyst from the Bank of Communications has stipulated that due to overall stabilization of economy, people don’t expect further depreciation of the currency, which might have led to the aforementioned decision by the Central People’s Bank. Analysts agree that If China wants to establish yuan as the world reserve  currency it needs to further loosen tight trade restrictions, currently in place.

Despite these developments, the yuan fell 0.46% to 6.346 this Monday, which is the biggest one-day depreciation since august, when Chinese government devalued the currency.  Currently, there is a widespread speculation that the economy is going to continue slowing in the fourth quarter. Evan Lucas of IG speculates that the currency fixing was an attempt to moderate yuan’s decline that started after devaluation. These developments are part of an overall trend of slowing down of East-Asian economies.



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