Chinese yuan strengthens for three consecutive days against USD

Xinhua
The Chinese yuan strengthened for the third straight trading day against the US dollar on Tuesday.
Xinhua

The Chinese yuan strengthened for the third straight trading day against the US dollar on Tuesday, cementing a rebound that came after a week-long slip and mitigating worries about further fluctuations amid rising global uncertainty.

The central parity rate of the yuan hit 6.836 against the US dollar on Tuesday, the strongest since August 9, according to the China Foreign Exchange Trade System.

With a rate change of 358 basis points from a day earlier, the currency also saw the largest appreciation in a single day since July 26.

The currency has shown signs of stabilizing from a weakening streak that started in April when a stronger US dollar, in part due to a recovering American economy and interest rate hikes, has sent multiple major global currencies into depreciation.

Chinese authorities have stepped up efforts to ensure a stable foreign exchange market.

The central bank has imposed a 20-percent reserve requirement ratio for forward forex trading, effective August 6, a move aimed at curbing market volatility and cross-border arbitrage, as well as financial risks.

In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

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