The central bank of the Asian nation implemented a reference exchange rate that spurred the U.S. dollar higher on Monday. Preoccupations are growing about the sovereign debt crisis rearing again in the euro zone after Cyprus was approved for a bailout.
"The yuan could have fallen much more due to the dollar's rally had the PBOC not maintained its midpoint largely stable," a trader at a major Chinese commercial bank in Shanghai told The Economic Times. "The central bank's efforts to keep the yuan largely stable for now underlines market expectations that the yuan is likely to remain large unchanged in the near term."
China extended the chairman Zhou Xiaochuan as central bank head on Saturday, furthering the tenure of the longest-serving central bank chief.
Political leaders in Cyprus are set to vote on whether they will approve terms and conditions of the bailout, which include taxing depositors in the nation as much as 9.9 percent.
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