China’s central bank weakened the renminbi by the most in more than two months against the dollar, sparking speculation the move was an attempt to get ahead of any monetary tightening by the US next month.
The People’s Bank of China fixed the midpoint of the renminbi’s onshore trading range at Rmb6.515 against the dollar on Thursday — 214 basis points, or 0.33 per cent, weaker than the day before. It was the largest daily change in the midpoint — around which the renminbi can trade 2 per cent either side — since January 7.
The move comes after a week-long rally by the dollar against a range of currencies after Federal Reserve officials signalled that the US central bank could yet raise interest rates in April, in spite of a reduction in rate-rise forecasts at the Fed’s most recent meeting.