© Bloomberg. Chinese one-hundred yuan banknotes are arranged for a photograph in Hong Kong, China, on Monday, April 15, 2019. China’s holdings of Treasury securities rose for a third month as the Asian nation took on more U.S. government debt amid the trade war between the world’s two biggest economies.
(Bloomberg) — China’s central bank set its daily yuan fixing at a stronger-than-expected level just before President Xi Jinping said the country won’t pursue currency depreciation that harms other nations.
The People’s Bank of China set its daily reference rate, which restricts the onshore yuan’s moves by 2 percent on either side, at 6.7307 per dollar. The fixing was stronger than all forecasts that 17 traders and analysts offered to Bloomberg in the morning. The yuan rose 0.18 percent to 6.7325 a dollar as of 10:22 a.m. in Shanghai.
“It could be a signal from the authorities that they do not want the yuan to be too weak,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group in Singapore.
China will not depreciate the yuan in a way that harms other countries, and the currency will be kept basically stable at reasonable levels, Xi said about an hour after the fixing at the Belt and Road forum in Beijing.
The surprising fixing comes as U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to travel to Beijing for trade negotiations with China next week. The yuan has been part of the negotiations, amid U.S. concern over any potential depreciation in the currency, raising expectations the matter will be addressed in the final agreement.
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