Ringgit falls to a 4-month low following China’s indicative movePETALING JAYA: The ringgit fell to a four-month low against the US dollar following China’s move to lower its reference rate for the yuan, bringing the yuan to the lowest level against the US dollar in six years. Under a trading band mechanism, the People’s Bank of China (PBoC) guided the daily reference rate for the yuan to a six-year low yesterday as the country’s markets resumed trading after a week-long holiday. Its daily rate of 6.7008 yuan against the greenback was a 0.3% depreciation from its last fixing price of 6.6778 on Sept 30. On Aug 11, 2015, the Chinese central bank cut its daily reference rate for the yuan by 1.9%, triggering a major selloff across asset classes globally. Defending the yuan against large fluctuations over the past year as part of the daily reference rate mechanism has taken a toll on China’s forex reserves.

Source: The Star October 10, 2016 22:18 UTC