Today China devalued its currency, the yuan or renminbi, to 1.86 percent, the biggest drop since 1994 against the dollar, to better reflect the market situation.
The central bank of China (PBOC) said the yuan is too strong against the dollar and other major currencies of the world, citing a dispatch from the Xinhua agency.
“The PBOC has decided to improve its system of central parity so that the exchange rate of the Chinese currency, the renminbi (RMB), or yuan, relative to the US dollar the better it reflects the market situation, “he said.
He added that the central parity of RMB has deviated from its true market rate “heavily over a long period of time”, which has “weakened the authority and status of reference” central parity system.
After the change, The central parity rate of the Chinese currency fell on Tuesday in 1,136 basic, or 1.86 percent points, which placed the renminbi at 6.2298 against the dollar, Xinhua noted.
“It is necessary to further improve Quotes yuan to be more consistent with the needs of the changing market, “said the Chinese central bank.
He added that as the US economy improves and increases the rate anticipated interest this year, the currencies of emerging economies in general have depreciated against the dollar and a strong yuan has created pressure on Chinese exports.
Jram
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