Yuan stutters near 5-month low

SHANGHAI: China’s yuan hovered near a five-month low against the dollar on Monday after the central bank set the official guidance rate at the weakest level in two months.

The yuan was trading at 7.2468 per dollar at 0308 GMT, 3 pips weaker than the previous close and just a fraction ahead of a 5-month low of 7.2478 hit in early trade.

The currency is down 2.1% this year, pressured by its relative low yields versus other currencies and outflows of foreign investment from an anaemic stock market.

Prior to the market’s opening, the People’s Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1066 per dollar, the weakest level since February 28.