China lifts yuan midpoint to highest since July 2019 on persistent dollar weakness

The People's Bank of China set the midpoint rate at 6.8605 per dollar prior to the market open.
The People's Bank of China set the midpoint rate at 6.8605 per dollar prior to the market open.PHOTO: UNSPLASH

SHANGHAI (REUTERS) - China's central bank lifted its official yuan midpoint to the highest in 13 months on Monday (Aug 31) to reflect persistent weakness in the US dollar in global markets.

The People's Bank of China (PBOC) set the midpoint rate at 6.8605 per dollar prior to the market open, 286 pips or 0.42 per cent firmer than the previous fix of 6.8891 on Friday, and was the strongest since July 2, 2019.

However, the fixing was not set as high as the market had expected. It was 55 pips weaker than a Reuters' estimate of 6.8550 per dollar.

The move in Monday's official guidance rate was the biggest one-day strengthening in percentage terms since Aug 6.

The dollar was poised to register its fourth consecutive monthly decline, its longest streak since the summer of 2017.