Chinese banks bought yuan in the offshore market and kept it on their balance sheet.
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China’s central bank kept the daily fix for the yuan stable for the fourth consecutive day at 6.5630 per dollar, almost unchanged from Tuesday. The Shanghai Composite yoyo’d in and out of negative territory and closed down 2.4 percent at 2,949.60.
The Hong Kong dollar posted its worst fall in 12 years against the greenback in late local trade yesterday as bets on more yuan depreciation spilled over to the local currency market.
China imported almost 40 percent less from Africa in 2015 than the previous year, but Chinese exports to Africa rose by about 4 percent in the same period, Chinese officials said Wednesday, according to a report in Mail&GuardianAfrica.
The panic seen in financial markets last week has receded since Chinese policy makers intervened to halt the yuan’s drop to a five-year low, reducing the risk of a currency war.
In December, banks’ new lending reached 597.8 billion yuan, down 345.3 billion yuan from the same month of 2014, said the People’s Bank of China (PBOC), the central bank. Global markets were rattled by steep falls in Chinese stocks and a bigger than usual drop in the tightly controlled yuan.
On Wednesday, China’s December trade data beat forecasts and tempered some of the fears about the slowdown in the world’s second-largest economy.
While the positive news sent Shanghai stocks higher initially, they ended yesterday 2.4 percent in the red again having already slumped nearly 15 percent this year.
Crude oil imports in 2015 rose 8.8 per cent to 334 million tonnes while that of iron ore climbed 2.2 per cent to 953 million tonnes.
The yuan traded at 6.6162 to the dollar in the freely traded offshore market, up 0.3% from the previous day.
The renewed bout of volatility in China added to investors’ concerns about slowing growth in the rest of the region during the Asia day. Hong Kong’s dollar, which is kept in a range from $HK7.75 to $HK7.85 versus the United States currency, weakened as much as 0.09 per cent to $HK7.7667.
There is more good news from China on better than expected exports for December, showing that the devaluation of the CNY (aka Chinese Yuan) is working. The onshore yuan fell by about 0.2%.
China’s central bank set the yuan at 6.5637 to the dollar, marking the sixth-straight session it has guided the currency roughly steady.
Economic growth fell to a six-year low of 6.9 per cent in the quarter ending in September.
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Carmaker Ford (F) set a special dividend worth $1 billion, but its outlook for the year failed to impress analysts on Wall Street.
