Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
China's yuan rate cut took reductions to 3.5 per cent this week, the largest in more than two decades/AFP


China fixes yuan at over five-year low against dollar

China's yuan rate cut took reductions to 3.5 per cent this week, the largest in more than two decades/AFP

China’s yuan rate cut took reductions to 3.5 per cent this week, the largest in more than two decades/AFP

SHANGHAI, China, May 30 – China’s central bank on Monday set the value of the yuan currency at a more than five-year low against the US dollar, according to the national foreign exchange market, in a pattern of weakness in anticipation of higher US interest rates.

The People’s Bank of China put the yuan also known at the renminbi (RMB) at 6.5784 to $1.0, down 0.45 percent from its fix on Friday, according to data from the China Foreign Exchange Trade System. The level was the lowest level since February 2011.

China only allows the yuan to rise or fall two percent on either side of the daily fix, one of the ways it maintains control over the currency.

“The yuan will depreciate gradually,” Song Yu, China economist for Goldman Sachs/Gao Hua Securities, told Bloomberg News. “The main driver for the decline would be a stronger dollar on the back of the expectation that the Fed will raise interest rates.”

US Federal Reserve Chair Janet Yellen last week implied that interest rates could be lifted soon.

Yellen, speaking at Harvard University on Friday, said a US rate hike “probably” would be justified “in the coming months” if economic data continued to strengthen.

China rattled global investors with a surprise devaluation last August, when it guided the normally stable yuan down nearly five percent over a week.

At mid-morning on Monday, the yuan was quoted at 6.5800 to the dollar on the onshore market, weakening 0.31 percent from Friday’s close, according to the national market.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...