SEOUL: The Chinese yuan rose on Tuesday after the country said it would relax from Jan. 1 restrictions on renminbi trading by banks, even as most emerging Asian currencies edged down on risk aversion following growing political uncertainty in Greece.
China will replace daily caps on banks' foreign exchange positions with weekly limits, and for the first time establish unified standards for total foreign exchange positions that banks can hold, rules published by the country's State Administration of Foreign Exchange on Tuesday showed.
The change helped the yuan reverse its initial slide. The renminbi fell to 6.2362 per dollar in early trade, its weakest since June 25.
"We still consider this rule as supportive of RMB," OCBC Bank's economist Tommy Xie said in a client note, referring to the yuan.
"The fact that some banks will be exempted from being forced to keep minimum long dollar positions may alleviate pressure on RMB depreciation."
The measure came amid growing pessimism over the Chinese currency on slowing economic growth. The yuan has lost 2.5 percent against the dollar so far this year.
Malaysia's ringgit hovered near a five-year low as the dollar hit a 29-month high against the euro on worries that a snap election in Greece may derail the country's international bailout plan.
The South Korean won fell on caution over possible intervention by the foreign exchange authorities to check its strength against the yen, traders said.
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