Futures Market News
China applies largest daily fixing to yuan in 22 years after news of $31.5 billion trade deficit in February
Mar 12, 2012 01:28 PM
The host of the globe's second-largest economic system responded to news about February resulting in its largest trade deficit in 22 years by implementing the largest daily fixing since August 2010, Bloomberg reports.
The yuan had its sharpest losses on Monday in seven weeks after last month's trade shortfall amounted to $31.5 billion, which is four-times as big as what previously was the largest trade deficit. Zhou Xiaochuan, governor of the People's Bank of China, eluded a line of questioning driving toward whether the institution he leads has exerted effort on halting the renminbi's rise, according to The Financial Times.
"When you have conditions like this where markets have elevated volatility and the external outlook isn't that clear, the PBOC tends to fix the yuan quite randomly," foreign-exchange strategist Andy Ji with Commonwealth Bank of Australia in Singapore told Bloomberg. "They will try to move the yuan lower. We expected exports to slow."
The value of the yuan so far has dropped 0.5 percent against the U.S. dollar. In all of 2011, the monetary unit gained 4.7 against the world's reserve currency.
Xiaochuan did note the institute he leads ought to create circumstances to encourage more market supply and demand, according to The Financial Times.
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