1st Ld: Chinese yuan weakens to 6.5169 against USD Tuesday

The People s Bank of China (PBoC) says it is seeking to make the unit more market-oriented, and has succeeded in a long campaign to have the International Monetary Fund include the yuan in its Special Drawing Rights basket. It was the lowest level since September, 2011.

China’s onshore yuan firmed against the USA dollar on Tuesday (Jan 5) after suspected interventions from the central bank, three traders told Reuters.

China’s yuan fell the most since August, hastening its decline in extended trading hours on speculation the authorities stopped supporting the currency late in the day. The market widely expects the Chinese currency to continue depreciating this year, and is likely to hit 6.8 per dollar by the end of 2016, a fall of 4.7 percent.

The yuan and China’s stock markets slumped on Monday as surveys showed its factory activity continued to contract, reviving fears of a global economic slowdown.

The yuan closed at 6.5338 per USA dollar on Monday, but strengthened immediately after the opening on Tuesday and traded at 6.5197 by mid-morning. “They were apparently trading on behalf of the PBOC to help control the pace of yuan depreciation”.

The central bank set its daily fixing for the onshore yuan at 6.5169, or 0.26 percent stronger than the currency’s last price at 11:30 p.m. on Monday and little changed from the 4:30 p.m. level. It traded 1.71 percent weaker than the onshore spot at 6.6335 per dollar near midday.

Against the USA dollar, it finished 2015 with a record yearly loss of 4,7% after volatile trade over the last five months.