BEIJING: China’s yuan dropped to its lowest level against the dollar in over four years Friday, as the central bank steadily guides the currency lower amid an economic slowdown and hefty capital outflows.
The yuan, or renminbi as it’s also known, fell to 6.4550 against the dollar, its lowest level since August 2011.
Earlier Friday, the People’s Bank of China (PBOC) had set the mid-point for the yuan at a new four and a half year low of 6.4358, down 0.2 percent from Thursday’s fixing.
China’s central bank lets the yuan spot rate rise or fall a maximum of 2 percent against the dollar relative to the official fixing rate.
Stuttering growth in the world’s second-largest economy and capital outflows have spurred expectations of further currency weakness in recent weeks.
Chinese economic growth dipped to 6.9 percent in the third quarter, dropping below the 7 percent mark for the first time since the global financial crisis of 2008-2009, sparking concerns of a hard landing in China after years of explosive growth.
Net capital outflows totaled $113 billion in November—the largest on record—according to Julian Evans-Pritchard, an economist at Capital Economics.
According to economists, the PBOC is expected to continue with its recent policy of gently guiding the yuan fixings lower to reflect the change in economic fundamentals.
