Yuan, other Asian currencies still weakening
By Ted Chen ,The China Post
February 26, 2014, 12:45 am TWN
TAIPEI, Taiwan -- The Chinese yuan on Monday recorded its fifth consecutive session of weakening against the greenback, propelling a similar decline against the local currency, representing the preconditions for an ideal entry point for investors favoring yuan-denominated fixed deposits, according to reports.
Against the New Taiwan dollar, the yuan's spot rate on Monday dipped to NT$4.995, with numerous intermediary bank managers remarking that it is a good time to increase yuan holdings. Until recently, the yuan had been maintaining strength at above the NT$5 benchmark against the local currency, with the recent dip attributed to China's waning trade surplus in February, said bank managers.
Concurrently, the South Korean won in recent sessions also weakened against the dollar, propelling three sessions of consecutive decline in the local currency's strength against the greenback. The New Taiwan dollar on Monday reached NT$30.425 against the greenback, declining by NT$0.03, with intraday volume reaching US$819 million.
According to intermediary bank managers, despite five days of consecutive declines in strength, the weakening of the yuan is expected to be limited.
Meanwhile, the People's Bank of China reportedly began stabilization measures yesterday, pulling the yuan to regain the 6.1184 range against the greenback.
Compared to alternatives, the yuan, with fixed deposit interest rates exceeding 3 percent, is rapidly replacing the U.S. dollar and the euro as the preferred currency among domestic investors.