People's Bank of China sets renminbi fix at weakest in six years

Helen Cahill
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Communist China's former leader Mao Zedo
China has been looking to boost the status of its currency (Source: Getty)

The People's Bank of China (PBoC) has set the midpoint about which the currency can trade higher than 6.7 renminbi for the first time since 2010.

Following the announcement, both the onshore renminbi CNY and the offshore renminbi CNH (which trades mainly in Hong Kong) came close to the six-year lows that they came to a few months ago.

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The Golden Week holiday has shut down mainland China's markets since September 30, and when the CNY began trading this morning is fell to Rmb6.7045, close to the six-year low that it hit in July.

The CNH today weakened to Rmb6.7135. China's currency is now one of the weakest performers this year.

China recently pledged to boost the renminbi's position in the international economy; the PBoC said it wanted to increase the currency's use as a reserve currency for central banks and governments and said it wanted the renminbi to take a bigger role in cross-border investment and trade.

Read more: Yuan currency to rule them all: China seeks to boost renminbi

The International Monetary Fund (IMF) announced last year the the yuan would be added to those that it keeps as a reserve currency, the IMF's so-called "special drawing rights" (SDR), putting it in the same league as the US dollar, the euro, the Japanese yen and sterling. The SDR inclusion became effective at the beginning of this month.

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