China’s yuan inches lower

SHANGHAI: China’s yuan inched lower against the dollar on Wednesday, as market participants continued to evaluate the impact from China’s steady lending benchmarks and possible changes in monetary policy stances at overseas central banks.

China stood pat on benchmark lending loan prime rates (LPRs) at the monthly fixing on Wednesday, matching market expectations, after the central bank kept its medium-term policy rate steady earlier last week.

“As deflationary pressure remains high in China, the People’s Bank of China (PBOC) will continue with its easing bias,” analysts at ANZ said in a note.

“We expect further rate cuts of 20 basis points in total in 2024 and cannot rule out the possibility of it cutting the reserve requirement ratio (RRR) to ensure adequate liquidity.”