August 23, 2019 / 1:32 AM / 2 months ago

China sets yuan mid-point at fresh 11-yr low, but much stronger than forecasts

SHANGHAI, Aug 23 (Reuters) - China’s central bank lowered its official yuan midpoint to a fresh 11-year low on Friday, but it was nowhere as weak as traders had expected.

The People’s Bank of China (PBOC) set the midpoint rate at 7.0572 per dollar prior to market open, 82 pips weaker than the previous fix of 7.0490 and the weakest since March 21, 2008.

However, traders said Friday’s official guidance rate came in much stronger than their forecasts, and they took it as an official attempt to slower the pace of yuan depreciation. The official fixing was 102 pips or 0.14 percent firmer than Reuters’ estimate of 7.0674 per dollar.

Onshore spot yuan fell to fresh 11-year lows on Thursday amid worries about the deepening Sino-U.S. trade war, despite support from major state-owned banks in both the spot and forwards markets. (Reporting by Winni Zhou and John Ruwitch; Editing by Simon Cameron-Moore)

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