Yuan Weakens Again As PBOC Rate Edges Down

The yuan weakened further against the US dollar as the People's Bank of China (PBOC) lowered its daily reference rate again amid a deepening currency row between Beijing and Washington.

The central bank on Wednesday fixed the yuan's central parity rate at 6.9996 per US dollar, weaker than the level set on Tuesday, when it hit an 11-year low.

Both the onshore and offshore yuan slid in late morning trading on Wednesday reaching 7.0454 and 7.0796, respectively.

The yuan breached the key 7.0 threshold against the US dollar on Monday – days after the US announced plans to impose fresh tariffs on Chinese imports from September 1– prompting Washington to officially brand Beijing a "currency manipulator".

PBOC said on Tuesday it is "resolutely opposed" to such a label, and the bank's governor Yi Gang has long vowed it would not engage in a competitive devaluation.

Allowing the yuan to depreciate makes Chinese exports cheaper and offsets some of the burden of punitive US tariffs, which could soon see virtually all of the roughly US$660 billion in goods traded annually between the world's top two economies subject to duties. (AFP)