SHANGHAI: China’s yuan inched higher against the dollar on Thursday, as the central bank’s latest move to prop up the equity market buoyed investor sentiment and offset broad greenback strength.
China’s central bank said earlier in the day that it would start accepting applications from financial institutions to join a newly created funding scheme, initially worth 500 billion yuan, to aid the capital market.
The announcement came ahead of the long-awaited finance ministry press conference on Saturday to detail plans on fiscal stimulus.
“We expect RMB gains on policy stimulus to be gradual given a still fragile economic outlook, and high uncertainty with regards to external trade and tariffs,” said Chang Wei Liang, FX & credit strategist at DBS, noting the recent market swings between anticipation and disappointment over China’s fiscal support.
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