The Chinese yuan traded in a positive territory against the US dollar in European deals on Friday, after reports of the central bank intervention to stabilise the currency.
The People’s Bank of China reportedly intervened in the market, ordering state banks to buy the yuan at designated rates on behalf of the monetary authorities to prevent currency devaluation.
China’s local pension funds will begin investment in stocks and other assets worth 2 trillion yuan at the earliest, reports said.
The yuan advanced to a 4-day high of 6.3880 per dollar, and held steady thereafter. The next possible resistance for the yuan may be located around the 6.2 mark. The pair finished yesterday’s trading at 6.4035.
The PBOC set today’s midpoint rate at 6.3986 per dollar, 0.15% firmer than the previous fix of 6.4085. The bank sets the central parity rate every morning and allows the currency to move upto 2% from that level.