President Hu Jintao today reiterated government goals of maintaining steady and fast growth in the world's fourth-biggest economy and controlling inflation. China will raise tax rebates on exports of textiles and garments to 13 percent from 11 percent, the State Administration of Taxation said yesterday.
The yuan fell 0.16 percent to 6.8425 per dollar in Shanghai as of 5:30 p.m., from 6.8318 yesterday, according to the China Foreign Exchange Trade System. It slumped 0.34 percent this week.
Traders in the forwards market have pared bets on the extent of yuan appreciation. Non-deliverable forwards contracts show the yuan will reach an implied rate of 6.5450 per dollar in the next 12 months, compared with 6.4005 two weeks ago. The contracts, settled in dollars, allow investors to bet on the future value of the yuan.
The People's Bank of China set a weaker reference rate for the yuan for a third day. The yuan is allowed to trade by up to 0.5 percent against the dollar either side of the rate, which was fixed at 6.8423.
The Chinese currency has gained 6.7 percent versus the dollar this year, making it the best performer among the 10 most-active Asian currencies excluding the yen.
The State Council approved a plan to set up an exchange rate department under the central bank to help strengthen supervision of capital flows, China Securities Journal reported today, without saying where it got the information.