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Fed rate hike expectations, Brexit blamed

Reporter: Yang Chengxi 丨 CCTV.com

10-25-2016 00:51 BJT

The Chinese yuan continues to weaken against the US dollar. The onshore yuan closed at 6.77 yuan per US dollar on Monday. That was 119 basis points lower than the previous close.

The People's Bank of China lowered the midpoint for the yuan by 132 basis points on Monday. That was the currency's lowest level in six years.

Analysts say the expectations of a US Fed rate hike and the fallout from Britain's decision to leave the European Union has continued to add uncertainty to global foreign exchange markets.

Chinese experts say the factors behind a weakening yuan are still mostly external.

"As China continues to deal with overcapacity and pursue structural reform, the fundamentals of the economy will improve. In the long term, there is no basis for a sustained depreciation of the yuan," said Pan Guangwei, Vice President, China Banking Association.

Still, the yuan's midpoint has slipped more than 1.36 percent since the beginning of October. That decline is partly due to high expectations for a Fed rate hike.

As the US dollar keeps strengthening, currencies from the Euro to the Japanese yen have all experienced different levels of depreciation.

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