China’s c. bank widens yuan gap to prevent currency decline

China’s central bank set the yuan fixing at a wider gap against Reuters’ estimate, the largest in nearly five months, to prevent sharp declines in the currency, Reuters reported on Thursday.

The People’s Bank of China (PBC) set the midpoint rate at 7.0948 per US dollar, with a two per cent trading band.

This fixing was 1,311 pips stronger than Reuters’ estimate of 7.2259, the widest gap since November 2023.

The PBC aims to support the yuan after it slumped to a four-month low last Friday.

Analysts expect the PBC to prevent further weakness in the yuan and stabilise the CNY/CNH exchange rate.