Demand for dollar rises as yuan’s appreciation slows
China’s central bank had reportedly signalled a rollback of mainland banks’ foreign exchange forward reserve ratio which slowed the yuan's appreciation
As the yuan’s appreciation slowed over the past few days, demand for the US dollar remained stable over the long term, analysts and professionals in China’s finance industry told 21st Century Business Herald on Tuesday.
China’s central bank, the People’s Bank of China(PBOC), had reportedly signalled a rollback of mainland banks’ foreign exchange forward reserve ratio, which came into effect on Monday, the report added. The ratio was reduced from 20% to 0, enabling the trading of foreign currency forward.
The move by the PBOC looks set to slow the yuan’s appreciation, according to analysts from different banks interviewed in the report. Long-term wise, Chinese companies who require the dollar will look to acquire more in future, the report added.
An analyst from Huatai Securities said the value of the US dollar to the yuan will likely hover around the 6.6 mark following recent moves by the PBOC, the report said.