China's yuan weakened against the dollar on Friday but was still on course for its best week in more than a month, while interbank money rates were mixed for the week. The People's Bank of China set the official yuan midpoint rate at 6.8456 per dollar prior to market opening, the strongest level since January 24, 173 pips firmer than the previous fixing, which was 6.8629.
A trader at a Chinese bank in Shanghai said the strength in the yuan midpoint meant a cheaper dollar, which attracted companies to stock up on the greenback in morning trade, in contrast to their heavy dollar sales earlier this week. The spot market opened at 6.8536 per dollar and was changing hands at 6.8658 at midday, 118 pips weaker than the previous late session close and 0.30 percent softer than the midpoint.
Despite the losses in the yuan on Friday, the Chinese currency is set to gain around 0.2 percent on the dollar for the week - its best week since mid-January. In open market operations, the PBOC drained a net 150 billion yuan ($21.85 billion) through reverse repurchase agreement for the week.
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