The renminbi closed at its softest level in more than four years against the dollar on Tuesday as investors continued to fret about the capital outflows evident from currency reserve data published earlier in the week.
Weakness was even more marked in the more volatile offshore market, where the spread between onshore and offshore rates reached its highest in more than three months, implying investors expect China’s currency to continue weakening.
Tuesday’s onshore daily “fix” by the People’s Bank of China set the renminbi at Rmb6.4078 to the dollar, 0.15 per cent weaker than Monday, and the pair later closed at Rmb6.4179. The offshore rate — not restricted like its onshore counterpart to a 2 per cent band either side of the fix rate — fell by 0.3 per cent twice and closed at Rmb6.4919 — just shy of its Rmb6.5112 peak late in August.