Chinese Yuan play:-
The yuan slid by the most since a peg ended a decade ago after China’s central bank cut the currency’s reference rate by a record 1.9 percent, allowing depreciation to combat a slump in exports.
The currency dropped 1.3 percent to 6.2920 per dollar as of 10:06 a.m. in Shanghai, and slid 1.5 percent in Hong Kong’s offshore trading. The onshore spot rate was 1 percent weaker than the reference rate of 6.2298, within the 2 percent limit allowed by the People’s Bank of China.
Tuesday’s reference rate move was a one-time adjustment, the PBOC said in a statement, adding that it will strengthen the market’s role in the fixing and promote the convergence of the onshore and offshore rates. It said also that it will keep the yuan stable at a reasonable level. The effective exchange rate is stronger than that of other currencies, which is a deviation from market expectations, the central bank said.
Mr. Pratik Shah