Onshore yuan hits near one-week low, banks raise dollar deposit rates
The onshore yuan fell to 6.6735 per US dollar on 9 November, a near one-week low. Multiple Chinese banks have sharply raised dollar deposit rates, some above US benchmark levels, in a move analysts say could ease year-end yuan appreciation pressure.
The onshore yuan closed at 6.6735 against the US dollar on Monday 9 November, down 24 pips from its previous closing price on Friday and marking a near one-week low, according to RTHK. The yuan's central parity rate also fell to 6.7188 per dollar, its lowest in more than half a month and about 390 pips weaker than market forecasts.
Analysts attributed the decline to strong US non-farm payroll data for last month, which has increased the likelihood of a Federal Reserve rate hike next month. The US dollar index has been fluctuating at a high level, putting mild downward pressure on the yuan. However, analysts predicted limited further adjustment, citing expectations of strong seasonal demand for foreign-exchange settlement.
Separately, Reuters reported, citing multiple sources, that several Chinese banks have sharply raised US dollar deposit rates, with some now offering rates above the US benchmark level. Market participants said the move could help exporters retain dollar funds, reduce the concentration of corporate dollar settlements at year-end, and alleviate upward pressure on the yuan.