Chinese yuan weakens further, rating fixed closer to 7 a dollar

Beijing [China]: China’s currency weakened further against the US Dollar on Wednesday.

Citing the China Foreign Exchange Trade System, Xinhua news agency reported that the yuan’s central parity rate was fixed at 6.9996 per US dollar, weaker than the level set on Tuesday, when it hit a 11-year low.

On Tuesday, the communist country announced that its firms have suspended purchases of US agricultural products nearly a week after President Donald Trump announced his decision to slap additional tariffs on Chinese exports.

Beijing hopes that “the US will conscientiously implement the consensus reached at the meeting between the heads of state of China and the US, and have the confidence to implement the commitments to create the necessary conditions for cooperation in the agricultural fields between the two countries,” the Xinhua report said.

On August 1, Trump had announced that he would impose a 10 per cent tariff on the remaining USD 300 billion worth of untaxed imports from China, which came after trade talks between the two sides were held in Shanghai.

This means everything that China sells to the US, including clothes and iPhones to chemicals and construction equipment, will have levies of between 10 and 25 per cent on them starting in September, escalating the trade tensions between the two countries.

Calling the US’ decision a “serious violation” of the consensus reached by the two sides at the G20 summit in Osaka, Beijing said the move deviated from the right course and will in no way help to end the protracted trade war between two of the world’s largest economies.

Following the US’ announcement, China allowed the yuan to fall to its lowest level in more than a decade. The yuan traded above 7 per US dollar.