Yuan Posts Biggest Two-Day Drop in a Month as PBOC Cuts Fixing
- China will try and stabilize rate before G-20 meet, ANZ says
- Credit surge intensifies currency depreciation pressure: ING
The image of former Chinese leader Mao Zedong is displayed on a one-hundred yuan banknote in an arranged photograph at the Bank of China Hong Kong Ltd. headquarters in Hong Kong, China, on Thursday, Nov. 12, 2015. The People's Bank of China's 2015 edition of the 100 renminbi banknote, with new anti-counterfeiting features, starts circulating today.
Photographer: Xaume Olleros/BloombergThe yuan posted the biggest two-day decline in more than a month as the central bank’s fixing for the currency tracked an overnight advance in the dollar and official media voiced concern that capital outflows will increase.
Yuan depreciation expectations will accelerate outflows this year, a researcher with the State Information Center wrote in the Shanghai Securities News. This will constrain the use of monetary tools such as cuts to interest rates and bank reserve-requirement ratios, the researcher said. China’s foreign-exchange reserves shrank by $99.5 billion in January, the second-biggest decline on record.