Business & Finance

Reuters reveals China asked banks to suspend counter-cyclical factor in yuan fixing; market reacts

Reuters reported exclusively that China’s central bank had asked local banks to phase out a special tool it uses to prevent excessive declines in the currency, a move analysts took to mean it is willing to allow some weakness in its currency. The People’s Bank of China’s foreign exchange system later issued a statement confirming the Reuters report that banks participating in a daily operation to determine the yuan’s trading mid-point have phased out use of the counter-cyclical factor, or so-called X-factor, in its formula.

Market Impact

The yuan plunged in offshore trading after the Reuters report was published.

Article Tags
Topics of Interest: Business & Finance
Type: Reuters Best
Sectors: FX & Fixed Income
Regions: AsiaEmerging Markets
Countries: China
Win Types: Exclusivity
Story Types: Exclusive / Scoop
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