BEIJING (AP) – China has lowered the trading range for its currency again, showing its potential for use as a trade weapon against Washington, but the exchange rate steadied following declines that alarmed financial markets.
The central bank on Thursday set the starting point for the yuan’s daily trading at 7.0039 to the U.S. dollar – the first time since 2008 that the level was set below the politically sensitive level of seven to the dollar.
The yuan was trading at 7.0435 in mid-afternoon, but that was stronger than the previous day’s level.
Beijing alarmed investors Monday by allowing the yuan to fall to an 11-year low against the dollar.
The central bank has assured companies it will not permit sharp declines to continue and the exchange rate will be kept stable.