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Thursday, December 15, 2016, 12:05

Chinese yuan weakens to 6.9289 against USD

By Xinhua

BEIJING – The renminbi, or yuan, weakened Thursday against the US dollar after the US Federal Reserve decided to raise interest rates for the first time this year.

The central parity rate of the renminbi weakened 261 basis points to 6.9289 against the US dollar Thursday, according to the China Foreign Exchange Trading System.

Judging from the nation's economic fundamentals, the economy will maintain medium-high growth with a trade surplus and abundant foreign reserves

Mao Shengyong, Spokesperson , National Bureau of Statistics

The Federal Reserve Wednesday raised the benchmark interest rate by 25 basis points, the first and only time in 2016, and indicated a faster rate hike pace next year.

The Fed released its updated economic projections indicating that the central bank expects to raise rates three times next year, compared with the two times suggested in its September projections.

Analysts said that with a rate-hike largely priced in before Wednesday, the greenback was supported by speculations of more rate-hikes next year.

As the Chinese economy maintains medium-high growth, the renminbi has the conditions to remain basically stable, according to the National Bureau of Statistics (NBS).

READ MORE: RMB 'has conditions to stay stable'

Judging from the nation's economic fundamentals, the economy will maintain medium-high growth with a trade surplus and abundant foreign reserves, said Mao Shengyong, spokesperson for the NBS, at a press conference this week.

Other factors, such as the Belt and Road Initiative and the yuan's inclusion in the IMF Special Drawing Right (SDR) currency basket will also increase global demand for renminbi assets, according to Mao.

READ MORE: RMB recent depreciation no reason for concern

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.

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