Yuan falls against dollar after PBOC holds rate

China’s yuan fell on Monday to a one-month low of 7.1813 per dollar after the People’s Bank of China (PBOC) left the medium-term policy rate unchanged, Reuters reported.

“Some economists have argued that the PBOC may have chosen to hold rates steady to avoid further downside in the yuan, and excess volatility in the FX market,” said Kathleen Brooks, research director at XTB.

The yuan has weakened more than one per cent against the dollar so far this year to a more than one-month low due to uncertainty around when the U.S. Federal Reserve will start cutting interest rates.