Chinese yuan notches weaker

13 Apr, 2004

The yuan ended one notch weaker versus the dollar at 8.2771 on Monday, but remained near the stronger end of its managed trading range.
The one-year non-deliverable dollar forward discount versus the yuan was at 2,850 points implying a rate of 7.993 yuan per dollar in 12 months' time.
NDFs are transactions where a forward price is agreed between a customer and a bank, but settlement on the value date is undertaken entirely in US dollars.
One-year implied yuan volatility was traded at 7.55/8.50 percent on Monday.
Implied volatility is a measure of how much the options market expects the price of the underlying asset to move during the life of the option.
The yuan moves in a band of 8.2760 to 8.2800 enforced by the central bank.
Turnover for the day was temporarily unavailable. It fell to $440 million on Friday. The yuan weakened to 7.7875 against 100 Japanese yen from 7.7706, but firmed against the euro to 9.9914 from 10.0007.
China's central bank plans to slash its weekly bill issue to 20 billion yuan ($2.4 billion) on Tuesday, as a hike in reserve requirements taking effect this month would drain hundreds of billions of yuan from the system.

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