Yuan hits 4-1/2-year low on year-end US dollar demand

A bank employee counting 100-yuan banknotes in Hangzhou, east China's Zhejiang province.
A bank employee counting 100-yuan banknotes in Hangzhou, east China's Zhejiang province. PHOTO: AFP

SHANGHAI (REUTERS) - China's yuan eased to 6.4948 to the US dollar on Tuesday (Dec 29), its weakest since May 2011.

Demand for dollars in the Chinese foreign exchange market typically rises at the end of the year, increasing market volatility and sometimes pushing the yuan sharply lower.

Such movements do not necessarily represent a trend, traders said.

Spot yuan closed at 6.4880 on Monday. It looks set to depreciate more than 4 per cent for the year.

In line with the market movements, the People's Bank of China set its official yuan mid-point rate at 6.4864 per dollar prior to the market open on Tuesday, its weakest level since June 2011.