HONG KONG: China's yuan held steady against the dollar on Wednesday after the central bank set its daily midpoint at a fresh 10-month high, an encouraging sign of stability in the Chinese unit amid fears of fallout from a currency crisis in Russia.
Safe-haven assets were in demand with yields on British, German and Japan sovereign debt hitting record lows while investors retreated from emerging market currencies.
Fresh economic data this week indicate Chinese economic growth may be stabilizing at lower levels and raising expectations the yuan is unlikely to weaken sharply.
The People's Bank of China (PBOC) fixed the official midpoint at 6.1137 per dollar, its strongest level since Feb. 19 and 0.07 percent higher from Tuesday's fixing of 6.1182.
Spot yuan changed hands at 6.1937, broadly unchanged from Tuesday's close of 6.1903.
"I expect the yuan to remain steady or maintain a slightly appreciating bias next year as the economic growth stabilises and Beijing seeks to expand the internationalisation of the yuan project," said Tai Hui, chief markets strategist at JP Morgan Asset Management in Hong Kong.
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