China Looks to Contain Yuan Volatility Amidst Falling Reserves
S. Rina | | Jan 11, 2017 06:45 AM EST |
(Photo : Getty Images) Chinese yuan showed high volatility in 2016 and the trend seems to continue this year too. Last week, the currency showed its biggest ever two-day gain of 2.47 percent on Wednesday and Thursday. The currency eventually slid on Friday and continued the decline on Monday this week.
China is planning to contain the fall of its currency value as the country struggles to maintain its reserves. The currency showed the signs of weakness this week and the People's Bank of China set the mark on Monday at 0.87 percent lower than last Friday.
Chinese yuan showed high volatility in 2016 and the trend seems to continue this year too. Last week, the currency showed its biggest ever two-day gain of 2.47 percent on Wednesday and Thursday. The currency eventually slid on Friday and continued the decline on Monday this week.
Like Us on Facebook
Stephen Innes, senior trader at Oanda, stated in a report, "Despite some semblance of order emerging, we should expect volatility to remain high." The volatility is also affected by global cues, which are beyond the realm of domestic authorities.
Chinese authorities are looking to control various factors causing the decline in yuan value. Recently, it directed state banks to withhold funds in the interbank market in Hong Kong. The move came as a surprise attack on people who had shorted yuan.
Yuan is fast gaining clout in the international monetary market. In October last year, the currency was added to the basket Special Drawing Rights by the IMF. The main assumption behind the addition was that it will propel the measures to liberalize the currency.
The country is also looking to curtail the capital flow out of the country. Chinese authorities have instituted several measures including closer scrutiny of outward remittance by individuals and corporates to ensure that the currency remains on stable ground.
©2015 Chinatopix All rights reserved. Do not reproduce without permission
EDITOR'S PICKS
-
Did the Trump administration just announce plans for a trade war with ‘hostile’ China and Russia?
-
US Senate passes Taiwan travel bill slammed by China
-
As Yan Sihong’s family grieves, here are other Chinese students who went missing abroad. Some have never been found
-
Beijing blasts Western critics who ‘smear China’ with the term sharp power
-
China Envoy Seeks to Defuse Tensions With U.S. as a Trade War Brews
-
Singapore's Deputy PM Provides Bitcoin Vote of Confidence Amid China's Blanket Bans
-
China warns investors over risks in overseas virtual currency trading
-
Chinese government most trustworthy: survey
-
Kashima Antlers On Course For Back-To-Back Titles
MOST POPULAR
LATEST NEWS
Zhou Yongkang: China's Former Security Chief Sentenced to Life in Prison
China's former Chief of the Ministry of Public Security, Zhou Yongkang, has been given a life sentence after he was found guilty of abusing his office, bribery and deliberately ... Full Article
TRENDING STORY
-
China Pork Prices Expected to Stabilize As The Supplies Recover
-
Elephone P9000 Smartphone is now on Sale on Amazon India
-
There's a Big Chance Cliffhangers Won't Still Be Resolved When Grey's Anatomy Season 13 Returns
-
Supreme Court Ruled on Samsung vs Apple Dispute for Patent Infringement
-
Microsoft Surface Pro 5 Rumors and Release Date: What is the Latest?