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China’s yuan inches up on firmer fix, property support steps

July 11, 2023 at 3:32 pm | Economic Affairs

July, 11(Agencies) ——China’s yuan inched up against the dollar on Tuesday after the central bank continued to set a firmer-than-expected midpoint fixing, while extended financial policy support for the troubled property sector also underpinned sentiment.
China’s central bank on Monday extended a rescue package to shore up the real estate sector, which is struggling to gain traction despite a range of measures aimed at easing a liquidity crunch that has plagued it since mid-2020.
The move “could be a signal that more property easing is coming,” said Larry Hu, chief China economist at Macquarie.
“Looking ahead, we expect to see more easing on the demand side, such as lowering the down-payment ratio and easing purchase restrictions.”
Prior to market opening, the People’s Bank of China (PBOC) set the midpoint rate at a new three-week high of 7.1886 per dollar, 40 pips firmer than the previous fix of 7.1926.
The official guidance rate also continued to be set much stronger than market projections, traders and analysts said, which they see as a sign of Beijing’s increasing discomfort with recent yuan weakness.
Tuesday’s official midpoint was 291 pips stronger than Reuters’ estimate of 7.2177.

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