China Lowers Yuan Fixing Most Since August 2010 on Trade Deficit
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China’s central bank weakened its daily fixing for the yuan by the most since August 2010 after the government reported the biggest trade deficit in at least 22 years.
The currency fell the most in seven weeks as People’s Bank of China Governor Zhou Xiaochuan said in Beijing the exchange rate is linked to the balance of payments. The nation’s trade shortfall was $31.5 billion in February, four times the previous largest deficit, according to data released on March 10 by the customs bureau. The central bank will use exchange rates and interest rates to manage the economy as Europe’s debt crisis damps global demand, it said in a statement today.