The Chinese authorities take steps to support the yuan. The local central bank has already established the yuan exchange rate at a higher level in order to stabilize the national currency. According to experts, this is the first measure in a series of efforts to revive the renminbi after the recent weakness. The yuan fixing was set at 7.0692 against the US dollar which exceeded the average forecast by 105 basis points. The spread had been the highest since February 3 which was the first trading day in China after the Lunar New year holiday extended due to the spread of the coronavirus. Usually, the Chinese authorities control the official exchange rate allowing the yuan to fluctuate within a 2% range from the daily fixing. By raising the exchange rate, the People’s Bank of China significantly reduced pressure on the yuan which the currency had faced for the last couple of weeks. The yuan traded at the level of 7.1082 against the greenback, strengthening briefly, and then dropped by 0.67%. Thus, the yuan became the worst among emerging market currencies which are tracked by Bloomberg. Meanwhile, the majority of currencies gained ground amid the unprecedented stimulus package introduced by the US government.
