Yuan slips despite state boosting bank stakes

SHANGHAI: China’s yuan weakened against the dollar on Thursday, even as state investor Huijin increased stakes in “Big Four” banks to lift market sentiment, and the greenback remained subdued amid more dovish signals from the Federal Reserve.

But some traders expect the yuan to get support from more stimulus from Beijing that will ease worries over the economy.

The spot yuan opened stronger at 7.2957 per dollar, but was changing hands at around 7.30 at midday, slightly weaker than the previous late session close.

Prior to the market open, the People’s Bank of China set the midpoint at 7.1776 per dollar, 1,156 pips stronger than Reuters’ estimate, reflecting authorities’ desire to prop up the currency.

The yuan market had muted reaction to news that state investor Central Huijin Investment Ltd increased holdings in China’s “Big Four” banks in an apparent move to lift market confidence.