Yuan Posts Longest Losing Run Since June as PBOC Support Wanes
- Central bank seen guiding currency lower to help the economy
- Yuan may rebound as dollar gains slow post Fed: Morgan Stanley
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China’s yuan weakened for an eighth day, the longest run of losses since June, on increased capital outflows and speculation that the central bank is guiding the currency lower to help an economy growing at the slowest pace in 25 years.
The People’s Bank of China cut the yuan’s reference rate for the seventh day in a row after a barometer of capital flows posted the second-biggest drop on record. This followed the authority’s move on Friday to play down the currency’s recent losses by saying its performance shouldn’t be measured against the dollar alone. While the PBOC was seen propping up its exchange rate in the past few months, it has allowed declines on all but one day since winning International Monetary Fund reserve status on Nov. 30.