SHANGHAI, Jan 25: The Chinese yuan fell slightly on Friday morning after the central bank set a slightly weaker official midpoint to reflect a rise in the dollar index the day before, shrugging off expectations of greater capital inflows as the economy recovers.
China’s foreign exchange regulator said that Chinese corporates bought more yuan from banks than they sold in December, with yuan purchases exceeding dollar purchases by $54.3 billion.
But traders said the news had little impact on trading, since these statistics tend to reflect what traders observe first-hand in the form of client flow.
Instead, market players and regulators at the People’s Bank of China (PBOC) are focused on following trends in the dollar index, which tracks the greenback against a basket of currencies dominated by the euro, they said. It rose 0.03 percent overnight.
Spot yuan was trading at 6.2202 per dollar at midday, slightly weaker than Thursday’s close of 6.2181. Trading volumes dropped to a $5.2 billion from a heavy $9.3 billion on Thursday morning.
Traders expect the yuan to remain relatively stable from now until the Chinese New Year holiday, which begins on Feb 9. (agencies)
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