China’s yuan was flat on Wednesday as dollar supply and demand were roughly in balance, offsetting a slightly stronger midpoint and better-than-expected economic data for the second quarter.
The People’s Bank of China (PBOC) set the midpoint rate at 6.1152 per dollar prior to market open, 0.02 percent firmer than the previous fix at 6.1165.
The spot market opened at 6.2090 per dollar and was changing hands at 6.2088 at midday, unchanged from the previous close.
China’s economy grew an annual 7.0 percent in the second quarter, steady with the previous quarter and slightly better than analyst forecasts, though further stimulus is still expected after the quarter ended with a stock market crash.
Traders said the slightly better second-quarter GDP figures had no immediate impact on yuan trading.
While the yuan was expected to continue trading narrowly in the short term as the central bank aims to keep it stable, traders said the Chinese currency was facing increasing depreciation pressure amid the risk of capital outflows.
China’s foreign exchange reserves, the world’s largest, declined for the fourth consecutive quarter to $3.69 trillion at the end of June, central bank data showed on Tuesday.
Still, “the central bank is able to keep the yuan stable via various measures, including daily midpoint fixings and dollar sales through big state-owned banks,” said a trader at a Chinese city commercial bank in Shanghai.
Offshore yuan at 6.2139 per dollar was trading 0.08 percent weaker than the onshore spot rate.