September 2, 2019 / 1:38 AM / 2 months ago

China sets yuan midpoint at new 11-1/2 yr low after new round of tariffs

SHANGHAI, Sept 2 (Reuters) - China’s central bank set its official yuan midpoint at a fresh 11-1/2-year low on Monday after Beijing and Washington kicked off new tariffs on each other’s goods.

However, the guidance rate was stronger than markets had expected for the fifth straight session.

The People’s Bank of China (PBOC) set the midpoint rate at 7.0883 per dollar prior to the market open, only 4 pips weaker than the previous fix of 7.0879 and the weakest since March 13, 2008.

Monday’s official guidance rate came in 174 pips or 0.25% stronger than Reuters’ estimate of 7.1057 per dollar.

The PBOC has persistently set its official fixing above the 7.1 per dollar level, which traders are interpreting as an official attempt to slow the yuan’s decline.

Onshore spot yuan posted its biggest monthly loss in 25 years in August as the trade dispute intensified.

The United States began imposing 15% tariffs on a variety of Chinese goods on Sunday - including footwear, smart watches and flat-panel televisions - and China began imposing new duties on U.S. crude, the latest escalation in protracted dispute.

Reporting by Winni Zhou and John Ruwitch; Editing by Kim Coghill

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