Yuan Falls


The yuan declined against the dollar for a second day this week on speculation China is slowing the pace of gains in the currency to support the economy.

China's yuan has depreciated 0.6 percent since the Politburo, the Communist Party's top decision-making body, pledged on July 25 to focus on sustaining growth as well as curbing inflation. The People's Bank of China has set up a new department to implement currency policy and monitor the foreign- exchange market, according to a statement on its Web site today.

The yuan dropped 0.04 percent to 6.8600 per dollar as of 5:30 p.m. in Shanghai, from 6.8570 late yesterday, according to the China Foreign Exchange Trade System.

China should prepare emergency plans to bolster the economy in case of an abrupt slump in growth, the State Information Center, a government think tank, said in a report published in the China Securities Journal yesterday. Slower growth in the U.S., Europe and Japan may have a bigger ``negative impact'' on China, the center said in the report.

China's industrial output growth cooled in July to 14.7 percent, the lowest since February 2007, the statistics bureau said today.

The U.S. Dollar Index, which tracks the currency against those of six trading partners, has advanced 4.2 percent since July 31. It rose 0.2 percent today.

China's economic expansion slowed to 10.1 percent in the second quarter, from 10.6 percent in the first three months.


TradingEconomics.com, Bloomberg
8/14/2008 7:13:09 AM