HONG KONG: China's yuan fell against the dollar on Tuesday as the central bank set a weaker midpoint, and
on further indications that China will roll out more stimulus measures to shore up the sluggish economy.
The People's Bank of China (PBOC) fixed the official midpoint at 6.1182 per dollar, down 0.05 percent from the previous day's 6.1152.
Spot yuan changed hands at 6.1943 near midday, down 0.05 percent from Monday's close at 6.1912.
"There have been many explanations for the recent spike in USD/RMB, but we think the two most probable reasons are onshore corporate USD demand from oilers and/or FX hedging of USD liabilities," Nomura analysts said in a note to clients.
But there was no sign of a shift in FX policy and the central bank was expected to maintain the appreciation bias on the CNY fix into 2015, the Nomura analysts added.
The yuan has been under pressure in the past month as demand for dollars from oil and coal companies increases near year-end, while a series of weak economic data from China implies more monetary easing ahead.
Activity in China's factory sector shrank in December for the first time in seven months as new orders declined, a preliminary private survey showed on Tuesday.
The flash HSBC/Markit manufacturing purchasing managers' index (PMI) fell to a contractionary 49.5 in December from November's final reading of 50.0 and below the 50.0 reading forecast by the market.
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