The yuan completed its first weekly decline in a month on signs the world’s second-largest economy is slowing as the central bank seeks to tame inflation and Europe’s debt crisis saps export demand.
The economy may continue to slow in the final quarter of the year and in the first half of next, National Business Daily reported today, citing Chen Dongqi, deputy director of the National Development and Reform Commission’s Chinese Academy of Macroeconomic Research. Gross domestic product increased 9.1 percent last quarter, the smallest gain since 2009.
“The yuan’s appreciation will likely slow modestly,” said Robert Minikin, a senior foreign-exchange strategist at Standard Chartered Plc in Hong Kong. “We expect to see more two-way variability and the moves will be less one-sided.”
The yuan fell 0.1 percent this week to 6.3840 per dollar in Shanghai, according to the China Foreign Exchange Trade System. The currency rose 0.02 percent today.
The People’s Bank of China set the currency’s reference rate 0.04 percent stronger at 6.3628 per dollar. The currency is allowed to trade up to 0.5 percent on either side of the daily reference rate.
Twelve-month non-deliverable forwards fell 0.2 percent this week to 6.4120 per dollar, a 0.4 percent discount to the onshore spot rate. In Hong Kong’s offshore market, the yuan depreciated 0.1 percent today to 6.4265 and rose 0.2 percent this week.
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