China's yuan opens weaker on fresh four-and-a-half-year low midpoint

A customer holds a 100 Yuan note at a market in Beijing.
A customer holds a 100 Yuan note at a market in Beijing. PHOTO: REUTERS

SHANGHAI (REUTERS) - China's yuan weakened against the US dollar on Tuesday (Dec 15) after the central bank set the midpoint at its lowest level in more than four years for the second day.

The People's Bank of China (PBOC) set its official midpoint rate at 6.4559 per dollar prior to the market open on Tuesday, its weakest level since July 2011, and 0.1 per cent weaker than the previous fix of 6.4495.

In the spot market, yuan opened at 6.4640 per dollar and was changing hands at 6.4659 in early trade, 0.11 per cent weaker than the previous close and 0.15 percent weaker than the midpoint.

The spot rate is allowed to trade with a range 2 per cent above or below the official fixing on any given day.

The PBOC said on Friday that it had begun publishing a yuan exchange rate weighted against a basket of currencies, a move that will eventually loosen the Chinese currency's link to the greenback and will let the yuan weaken further.

The offshore yuan was trading 1.28 per cent weaker than the onshore spot at 6.5495 per dollar.