As the Chinese currency rises against the US Dollar, the central bank of the country purchases USD.
Bloomberg reports that the People’s Bank of China was forced to act after the yuan’s 0.2% rise against US dollars earlier in this week, to 6.9964 yuan for every US dollar.
Unnamed sources familiar with this matter claim that Chinese banks are buying greenbacks in large quantities at an inflated rate of 7.0067 Yuan per Dollar, but no details have been given.
The report states that the Chinese currency is headed for the best year against the US Dollar in five years as China has strengthened its currency.
Wang Qing, co-chief macro analyst at Golden Credit Rating International.
The yuan was boosted by the weakness of the dollar, and by seasonal conversions by exporters. The yuan’s sustained rise will help to increase the attractiveness of China’s capital markets for foreign investors .”
Xing Zhaopeng, senior strategist at Australia and New Zealand Banking Group told Bloomberg he expected the yuan’s momentum to continue and that it would stay in the range of 6.95-7 against the US dollar during the first six months of the year. Other unnamed analyst said the yuan was still being undervalued.
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This article, Chinese Yuan Rallyes Against Dollar, Forces BRICS Nation’s Central Bank to Buy USD Abruptly: Report first appeared on The ICD.
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