China’s Yuan Halts Two-Day Drop as Policy Makers Seek Stability
The yuan snapped a two-day drop on speculation policy makers will seek stability in the currency before Chinese Vice President Xi Jinping visits the U.S. next week.
The People’s Bank of China set the reference rate steady at 6.3116 per dollar. The yuan, which advanced 4.7 percent in 2011, is little changed this year, according to data compiled by Bloomberg. U.S. lawmakers including Democratic Senator Charles Schumer of New York have said that an undervalued yuan gives Chinese exporters an unfair advantage over their American counterparts.
“Ahead of Xi’s visit to the U.S., the currency issue may emerge again,” said Teck Kin Suan, an economist at United Overseas Bank Ltd. in Singapore. “But China is seeking stability because of the global turmoil. We’re going to see appreciation, but the pace of gains won’t be as strong as last year’s.”
The yuan advanced 0.07 percent to 6.3078 per dollar as of 10:59 a.m. in Shanghai, according to the China Foreign Exchange Trade System. The currency is allowed to trade 0.5 percent on either side of the daily fixing.
In Hong Kong’s offshore market, the yuan was little changed at 6.3014. Twelve-month non-deliverable forwards rose 0.05 percent to 6.2756, a 0.5 percent premium to the onshore spot rate.
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