The yuan weakened 294 basis points on Monday to 6.5784 against the U.S. dollar, the lowest level since February 2011 Xinhua]
China’s central bank on Monday pumped more money into the market to ease a liquidity strain.
The People’s Bank of China (PBOC) conducted 65 billion yuan ($9.88 billion) in seven-day reverse repurchase agreements (repo), a process in which central banks purchase securities from banks with an agreement to resell them in the future.
The reverse repo was priced to yield 2.25 per cent, unchanged from last Friday’s injection of 95 billion yuan and Thursday’s 75 billion yuan, according to a PBOC statement.
The move followed a net injection of 45 billion yuan into the financial system on Friday.
On Monday’s interbank market, the benchmark overnight Shanghai Interbank Offered Rate (Shibor), which measures the cost at which Chinese banks lend to one another, rose 0.1 basis points to 2.002 percent.
The Shibor for seven-day loans also increased 0.1 basis points to 2.334 percent. The Shibor for three-month loans rose 0.35 basis points to 2.9455 per cent.
The central parity rate of the Chinese currency renminbi, or the yuan, weakened 294 basis points on Monday to 6.5784 against the U.S. dollar, the lowest level since February 2011, according to the China Foreign Exchange Trading System.
The fall came after US Federal Reserve Chair Janet Yellen said at Harvard University on Friday that an interest rate hike in the next few months would probably be appropriate if economic data improves.
Her comments boosted the US dollar against other major currencies.
Source: Agencies
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