China’s Yuan Ends at 28-month Low Despite Fresh Policy Step, Nears Daily Lower Limit
SHANGHAI—China’s yuan finished domestic trading session at a new 28-month low against the dollar on Monday, near its downside trading limit, despite the central bank taking steps to rein in the currency’s weakness.
The People’s Bank of China (PBOC) said it would raise the foreign exchange risk reserves for financial institutions when purchasing FX through currency forwards to 20 percent from zero starting on Sept. 28.
The announcement, along with another firmer-than-expected daily midpoint fixing, was meant to slow the pace of the yuan’s depreciation by making it more expensive to bet against it, traders said.
“This could stem further forward positions that have been negative for the yuan and slow its depreciation pace,” analysts at Maybank said in a note….