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1st LD-Writethru: Chinese yuan strengthens to 6.9042 against USD Monday

Xinhua, November 28, 2016 Adjust font size:

The Chinese currency, the renminbi or the yuan, appreciated against the U.S. dollar on Monday after sinking to its weakest point since June 2008 on Friday.

The central parity rate of the Chinese yuan strengthened 126 basis points to 6.9042 against the U.S. dollar, according to the China Foreign Exchange Trade System.

In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

The yuan's exchange rate will continue to be kept basically stable at a reasonable and balanced level, Yi Gang, deputy governor of the People's Bank of China, the central bank, said in an exclusive interview with Xinhua.

Accelerated economic growth in the United States, Donald Trump's victory in the presidential election and stronger expectations of an interest rate hike by the Federal Reserve have already caused the dollar to rise in value against most other major currencies since October. But the dollar's value has risen only modestly against the renminbi.

In developed economies, the Japanese yen, the euro and the Swiss franc have weakened 10.5 percent, 5.8 percent and 4.2 percent, respectively, against the dollar since October.

In emerging economies, the Malaysian ringgit, the Korean Won and the Mexican peso have depreciated 7.2 percent, 6.5 percent and 6.1 percent.

In contrast, the yuan has weakened just 3.5 percent against the dollar, much milder than other currencies.

Yi said focus should be on the yuan's value against a basket of currencies instead of just the dollar. Data showed that the yuan has strengthened against other major currencies since October, although it was weaker against the dollar.

Citing China's abundant foreign reserves, huge market and strong business environment, Yi also said he believes capital that has flowed from China will return in the future. Endi