PBOC sets yuan parity at 6.8633 vs dollar, HK overnight rate surges

Yuan parityYuan parity

Investing.com – The People’s Bank of China set the yuan mid-point at 6.8633 against the dollar on Wednesday, after a two-day holiday, compared to the previous close of 6.8525.

Hong Kong’s overnight yuan borrowing rate jumped to the highest point in nearly five months in the trading day, with the Interbank Offered Rate benchmark hitting 21.07933% for overnight contracts, the highest level since Jan.6. The previous fix was at 5.35283%.

The firmed sharply due to the elevated yuan borrowing costs and was traded at 6.8108 per dollar. The implied overnight deposit rate rose to 22.045%, after soaring as much as 45.754% in early trade on Wednesday.

The China Foreign Exchange Trade System sets the weighted average of prices given by market makers. The highest and lowest offers are excluded from the calculation. The central bank allows the dollar/yuan rate to move no more than 2% above or below the central parity rate.

Market watchers see a yuan level of 7 against the dollar, , as a key touchstone for sentiment in the near term.

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