Central Bank and USD CNY Exchange Rate

yuan: Over the last week, the spot USD/CNY exchange rate has hovered at around 6.39, three percent higher than before the central bank reforms on the yuan central parity rate last Tuesday, which devalued the yuan by two percent, according to Xinhua China. The move sparked a sell-off as traders worried about whether the central bank would allow the yuan to fall even further. The yuan central parity rate against the U.S. dollar strengthened by 3 basis points to 6.3963 on Wednesday. In response to worries, the bank signaled a three-percent decline would put the currency at a reasonable level and denied claims that the depreciation was to counter a slump in exports. With the central parity rate reform helping the yuan better reflect market consensus and the three-percent depreciation easing downturn pressure, the stabilized yuan may help investors regain their interest in China-related products. The market steadied in the last week. "The fast depreciation is over," said Wang Han, an analyst at Industrial Securities. "Stabilizing will be the main theme." Wang said the central bank would keep the yuan stable at its current level to soothe market expectations. (news.financializer.com). As reported in the news.