The Chinese currency continues its fall against USD
For experts it seems clear that China is on its way to liberalise its currency by the measure that the gains made in the past year were practically completely erased by falling each day of this week against the USD after the central bank doubled the currency’s trading band over the last weekend
On the over-the-counter market the USD hit 6.2009 CNY late Tuesday, its highest since April 9, 2013 when it was CNY 6.2038. The USD move higher from CNY6.1920 as of Tuesday’s close.
Experts estimate that the central bank will not support the CNY after it breaks the 6.2000 level in order to targeting a freer currency.
The People’s Bank of China pledged to give the market a bigger role in setting the Chinese currency’s exchange rate while widening the band, but stated also that it would still implement “necessary adjustments” to prevent big, abnormal fluctuations of the currency.
The CNY has risen more than 30 % since a 2005 revaluation with ended a decade long peg to the USD. After hitting a record of CNY 6.04 to the USD, it lost 2.6 % in January. In 2013 the CNY gained 2.9 % against the USD.
The offshore CNY market in Hong Kong, where the Chinese currency floats freely, the USD was at CNY 6.1937, higher than CNY 6.1790 late Tuesday.