SHANGHAI, Dec 28 (Reuters) - China's yuan held tight ranges against the dollar on Tuesday in thin holiday trade and as the country's central bank vowed to keep the foreign exchange market stable in the new year.
The yuan was changing hands at 6.3723 at midday, little changed from the previous late session close, after China's central bank set a slightly weaker midpoint rate .
The market remains in holiday mood and the yuan will likely continue to move in a narrow range, barring major, unforeseen events, traders say.
"I don't see trading opportunities in the short term," said a trader at a foreign bank in China.
China's foreign exchange regulator said it has maintained foreign exchange market stability and safeguarded national economic security in 2021.
In 2022, the State Administration of Foreign Exchange (SAFE) will step up risk monitoring and control to maintain market stability, the regulator said.
The People's Bank of China (PBOC) vowed to further improve foreign exchange management next year and shoulder the responsibility of stabilising the macro economy.
On Tuesday, the PBOC injected 200 billion yuan ($31.39 billion) through seven-day reverse repos into the banking system, the biggest daily injection since late October.
The PBOC's move came after China's short-term money rates hit their highest level in months on Tuesday, amid rising demand for cash towards the year-end.
The yuan market at 4:49AM GMT:
ONSHORE SPOT:
|
Item |
Current |
Previous |
Change |
|
PBOC midpoint |
6.3728 |
6.3686 |
-0.07% |
|
Spot yuan |
6.3723 |
6.3731 |
0.01% |
|
Divergence from midpoint* |
-0.01% |
||
|
Spot change YTD |
2.45% |
||
|
Spot change since 2005 revaluation |
29.88% |
Key indexes:
|
Item |
Current |
Previous |
Change |
|
Thomson Reuters/HKEX CNH index |
102.06 |
102.03 |
0.0 |
|
Dollar index |
96.08 |
96.053 |
0.0 |
*Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning.
OFFSHORE CNH MARKET
|
Instrument |
Current |
Difference from onshore |
|
Offshore spot yuan * |
6.378 |
-0.09% |
|
Offshore non-deliverable forwards ** |
6.5365 |
-2.50% |
*Premium for offshore spot over onshore
**Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. .
Reporting by Shanghai Newsroom; Editing by Sam Holmes
Source: Reuters