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China sets yuan midpoint at new 11.5-year low after new round of tariffs

China sets yuan midpoint at new 11.5-year low after new round of tariffs

Chinese 100 yuan banknotes are seen in a counting machine in Beijing, China, in this Mar 30, 2016 file picture. (File photo: REUTERS/Kim Kyung-Hoon)

SHANGHAI: China's central bank set its official yuan midpoint at a fresh 11-and-a-half year low on Monday (Sep 2) after Beijing and Washington kicked off new tariffs on each other's goods.

However, the guidance rate was stronger than markets had expected for the fifth straight session.

The People's Bank of China (PBOC) set the midpoint rate at 7.0883 per dollar prior to the market open, only 4 pips – points in percentage – weaker than the previous fix of 7.0879 and the weakest since Mar 13, 2008.

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Monday's official guidance rate came in 174 pips or 0.25 per cent stronger than Reuters' estimate of 7.1057 per dollar.

The PBOC has persistently set its official fixing above the 7.1 per dollar level, which traders are interpreting as an official attempt to slow the yuan's decline.

Onshore spot yuan posted its biggest monthly loss in 25 years in August as the trade dispute intensified.

The United States began imposing 15 per cent tariffs on a variety of Chinese goods on Sunday - including footwear, smart watches and flat-panel televisions - and China began imposing new duties on U.S. crude, the latest escalation in protracted dispute.

Source: CNA/nr


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