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Chinese yuan weakens to 6.883 against US dollar Wednesday

Xinhua | Updated: 2017-02-22 13:56

BEIJING - The central parity rate of the Chinese currency, the renminbi or the yuan, weakened 40 basis points to 6.883 against the US dollar Wednesday, according to the China Foreign Exchange Trade System.

In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

Like some major currencies, the renminbi weakened against the strengthening dollar in 2016 as the US economic recovery and expectations of US interest rate hikes helped the greenback.

Economists believe the yuan will see less depreciation pressure in the long run and will remain generally stable in the short term due to lingering uncertainties over the US dollar and policies of the Trump administration.

Li Daokui, an economics professor at Tsinghua University, said during a recent interview with China Securities Journal that pressure on yuan depreciation could ease in the second half of 2017 as some policies of the Trump administration might not deliver the intended results and appreciation of the dollar could slow.

China still has the largest stash of forex reserves in the world and they are abundant, he said.

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