June 19, 2012
Yuan steady vs dollar but trades far below PBOC mid-point
SHANGHAI: The yuan was little changed against the dollar on Tuesday but continued a recent trend of trading far below the central bank's midpoint as traders reported that Chinese companies increasingly tend to retain dollars on hand.
Traders told Reuters that investors' sentiment towards the prospect of a yuan appreciation in the future had weakened greatly over the past few months, making exporters reluctant to sell their foreign exchange earnings to banks as they used to do for years since the yuan's landmark revaluation in July 2005.
With the yuan now under pressure to depreciate partly due to increasing dollar demand, the central bank has recently set a series of midpoints stronger than the yuan's trading level, as it seeks to keep the exchange rate relatively stable
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