China’s yuan rose for the first time in four days on speculation policy makers will take steps to boost its global usage as it seeks to obtain reserve-currency status.
The yuan has become the most-used in Asia for payments to China and Hong Kong, the Society for Worldwide Interbank Financial Telecommunications said in a statement on Wednesday. Chinese officials are seeking to have the currency added to the International Monetary Fund’s Special Drawing Rights basket. The IMF’s mission in China will work closely with authorities toward inclusion, which is “not a matter of if, but when,” according to a report released Tuesday.
“China will keep the exchange rate stable, as that’ll be instrumental to boosting the yuan’s global usage and its reserve-currency bid,” said Kenix Lai, a foreign-exchange analyst at Bank of East Asia Ltd. in Hong Kong.
The yuan rose 0.04 percent to close at 6.2014 a dollar in Shanghai, halting a three-day drop of 0.12 percent, according to China Foreign Exchange Trade System prices. In Hong Kong, the currency advanced 0.03 percent to 6.2039, data compiled by Bloomberg show.
The People’s Bank of China cut the yuan’s daily fixing by 0.04 percent to 6.1198 a dollar, the weakest level since April 28. The gap between the onshore yuan and the fixing was 1.33 percent, within the 2 percent limit. The Bloomberg Dollar Spot Index, which measures the greenback against 10 major peers, rose 1.8 percent in the three days through Tuesday as U.S. data for April showed a recovery in the world’s largest economy gathering pace.
China may soon release rules for a program that allows some individuals to invest overseas, the Securities Times reported Tuesday, without citing anyone. The Qualified Domestic Individual Investor program will let those with net assets of at least 1 million yuan ($161,142) purchase offshore assets, with Shanghai, Tianjin, Chongqing, Wuhan, Shenzhen and Wenzhou among the trial cities, the newspaper reported.