Dec. 6 (Bloomberg) -- China’s yuan tested the weaker end of its permitted trading range for a fifth day on concern economic growth in Asia’s largest economy is faltering.
The People’s Bank of China set its daily reference rate little changed at 6.3334 per dollar, almost 0.5 percent stronger than the currency’s close yesterday. China returning to “rapid growth” is “not very realistic,” the 21st Century Business Herald reported today, citing Fan Jianping, director of economic forecasting at the State Information Center. Standard & Poor’s put 15 euro-area nations on review for possible downgrades yesterday and affirmed China’s AA- rating today.
“The market is increasingly concerned about the state of China’s property and export sectors as the euro-zone debt crisis deepens,” said Steve Wang, the Hong Kong-based head of fixed- income research at Bank of China International, a unit of China’s third-biggest lender by market value.
The yuan was little changed at 6.3642 per dollar at the close in Shanghai, according to the China Foreign Exchange Trade System. It dropped 0.02 percent to 6.3651 earlier. The currency is allowed to trade up to 0.5 percent on either side of the fixing. The yuan has advanced 3.7 percent this year, the best performance among Asia’s 10 most-traded currencies excluding the yen.
A purchasing managers’ index for non-manufacturing industries fell to 49.7 in November from 57.7 the previous month, the China Federation of Logistics and Purchasing said on Dec. 3.
China should increase yuan flexibility and draft clear goals for floating exchange-rate rules, Zhang Monan, a researcher at the State Information Center, wrote in a commentary in the Shanghai Securities News today. Former U.S. Treasury Secretary Henry Paulson said slower yuan appreciation could cause political problems for China in the U.S. during an election year, the Wall Street Journal reported.
Twelve-month non-deliverable forwards fell 0.14 percent to 6.3885 per dollar, a 0.3 percent discount to the onshore spot rate. In Hong Kong’s offshore market, the yuan advanced 0.02 percent to 6.3800.
--With assistance from Lilian Karunungan in Singapore. Editors: Andrew Janes, Simon Harvey
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