dollar: The People Bank of China , the country central bank, set the yuan central parity rate against the dollar at 6.7008 on Monday, the weakest level since September 2010, according to Global Times China. The yuan reference rate was set at 6.6778 against the dollar on September 30. Experts noted that this was mainly caused by the dollar strength amid rising expectations for an interest rate hike, arguing that the falling yuan would have a limited impact on domestic financial markets. Liu Dongliang, an analyst from China Merchants Bank, said on Monday that the level of 6.70, where the yuan traded for about three months, had been considered by some people as the bottom line of the yuan exchange rate against the dollar. "Now the 'bottom line' has been broken, which shows that the yuan fluctuation range has entered a new phase," Liu told the Global Times via e-mail on Monday. Xi Junyang, a professor at the Shanghai University of Finance and Economics, said that the key reason for the weaker yuan is rising market expectations for a US interest rate hike, presumably before the end of this year. The PBC issued a statement on Monday saying that the yuan exchange rate level in September was stable in general. "The yuan fluctuation against the dollar has been normal ... and there no basis for the yuan to depreciate on a long-term basis," the statement noted.
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