Chinese currency weakens to 6.7246 against the US dollar

06 Jul 2022 08:21 STI

beijing [China]July 6 (ANI): The Chinese currency’s renminbi central parity rate weakened 260 pips to 6.7246 against the US dollar on Wednesday, media reported citing the currency exchange system.
In China’s foreign exchange spot market, the yuan is allowed to rise or fall 2 percent against the central parity rate on each trading day, Xinhua News Agency reported.
The central parity rate of the yuan against the US dollar is based on a weighted average of the prices offered by market makers before the opening of the interbank market on each business day.
Earlier on Monday, the Chinese currency’s central parity rate weakened 208 pips to 6.7071 against the US Dollar.
Reports indicate that China’s foreign exchange market registered a turnover of 15.95 trillion yuan (about $2.38 trillion) in May, compared to 17.14 trillion yuan in April.
Amid uncertainty surrounding the zero-COVID policy, foreign issuers have held back offerings of Chinese panda bonds to invest in Asia’s biggest economy.
A Chinese renminbi-denominated bond sold in China but issued by a non-Chinese is known as a panda bond.

According to Nikkei Asia, issuance of so-called panda bonds from January to June halved from a year earlier to a six-year low of 7.9 billion yuan ($1.18 billion), according to Nikkei Asia. Refinitiv data.
Only two companies issued panda bonds in the first half: the financial subsidiaries of BMW and the Mercedes-Benz group, against five issuers a year earlier.
Panda bond issuance hit an annual high of 32.4 billion yuan in 2021, but the resurgence of the coronavirus this year has given issuers pause, Nikkei Asia reported.
As Shanghai and other cities have emerged from coronavirus lockdowns that have disrupted daily life and business activity for two months, the government’s hardline zero-COVID lockdown policy hangs like a cloud over the economic outlook.
“It’s unclear when lockdowns may occur in the future,” said Shinichi Seki, senior economist at the Japan Research Institute.
Smaller banks in China are in trouble as they are accused of crimes, bad debts and excessive risk, due to Xi Jinping’s failed zero Covid policy.
Last year, China Bohai Bank, a national joint-stock commercial bank, was accused of secretly using a customer’s $438 million in deposits as collateral. (ANI)

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