The Chinese yuan is rising against the US dollar, prompting the nation’s central bank to purchase USD.
The yuan rose 0.2% against USD earlier this week to 6.9964 yuan per US dollar, forcing the People’s Bank of China to take action, reports Bloomberg.
Sources familiar with the matter who wish to remain anonymous say that Chinese banks have been seen purchasing greenbacks at a high rate at about 7.0067 yuan per dollar, though no specific details were mentioned.
According to the report, the Chinese yuan is heading toward the best year in the last five years against the US dollar as the nation has strengthened its currency.
As stated by Golden Credit Rating International Co chief macro analyst Wang Qing in the report,
“The yuan has been bolstered by weakness in the dollar and seasonal foreign-exchange conversion by exporters. A sustained yuan gain will be helpful in increasing the appeal of China’s capital markets to foreign investors.”
Australia and New Zealand Banking Group senior strategist Xing Zhaopeng told Bloomberg that he expects the yuan to keep its momentum and stay between 6.95 to 7 against the dollar for the first half of next year while other unnamed analysts said they believe the yuan is still undervalued.
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