China's yuan holds steady as corporates cling to dollar
SHANGHAI, Nov 27 (Reuters) - China's yuan was little changed on Thursday, with strong corporate demand for dollars counteracting the eight-and-a-half-month high midpoint set by the central bank, traders said. By midday, spot yuan stood at 6.1392 per dollar, almost unchanged from Wednesday's close. The People's Bank of China (PBOC) fixed the yuan's daily midpoint at 6.1320 per dollar, the highest level since March 17, up 0.06 percent from the previous day's fix. Traders said corporates and individuals are keeping more dollars on hand as investors bet on further policy easing after the central bank cut benchmark interest rates last Friday. Further easing could end the Chinese currency's rally of more than 2 percent against the dollar since May. An index of the yuan's real effective exchange rate - the currency's value against a trade-weighted basket after adjustments based on inflation - showed an even more pronounced increase of 6.5 percent since May, according to the Bank for International Settements (BIS). Latest BIS data shows the yuan index rose 1.5 percent to 117.73 in October from 115.99 in Sepetember. Use of the renminbi also continues to rise, accounting for 11.2 percent of total payments between China and the rest of the world, state news agency Xinhua reported on Wednesday, citing Belgium-based global payment services company SWIFT. That's up from 6.2 percent 18 months ago. The onshore spot yuan market at a glance: Item Current Previous Change (pct) PBOC midpoint 6.132 6.1354 0.06% Spot yuan 6.1392 6.1389 0.00% Divergence from 0.12% midpoint* Spot change ytd -1.39% Spot change since 2005 revaluation 34.81% * Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The PBOC allows the exchange rate to rise or fall 2 percent from the official midpoint rate it sets each morning. OFFSHORE CNH MARKET For the weekly CNH Tracker column, see: http://link.reuters.com/ced53w The offshore yuan market at a glance: Instrument Current Difference from onshore (pct) Offshore spot yuan (pct) 6.1468 -0.15% Offshore non-deliverable forwards 6.251 -1.90% * Premium for offshore spot over onshore ** Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. . >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> FACTBOX - Yuan and capital account reforms and pilot programmes RECENT DEVELOPMENTS - PBOC cuts back on intervention, but not totally hands off - China's weak currency disappoints carry traders - Hong Kong should cherish its standing as offshore yuan hub - China c.banker - US warns China over currency depreciation - Capital flows, improving trade to prop up yuan in H2 KEY DATA POINTS - Yuan spot performance versus midpoint after trading band widened http://link.reuters.com/req62w - China's yuan, other emerging mkt currencies vs dollar http://link.reuters.com/xyd46v - Global currency performance INTERACTIVE GRAPHIC: http://link.reuters.com/cyx46v - China's trade surpluses mainly driven by weak imports rather than strong exports. GRAPHIC: http://link.reuters.com/qav68s - The yuan resumes appreciating on a trade-weighted basis GRAPHIC: http://link.reuters.com/sed74t >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> (Reporting by Shanghai Newsroom; Editing by Simon Cameron-Moore)
