Yuan slips on PBOC guidance, ignores Bernanke comment
* PBOC sets weaker midpoint, tolerates slight yuan fall
* Bernanke says China curbs yuan value for export benefits
* IMF says yuan slightly undervalued vs basket
* Traders see yuan flat or down slightly in near term
SHANGHAI, July 18 (Reuters) - The yuan edged lower against the dollar on Thursday after the central bank set a weaker midpoint, shrugging off renewed calls by the United States and International Monetary Fund (IMF) for the Chinese currency to appreciate. Spot yuan was trading at 6.1396 versus the dollar at midday, falling 0.07 percent from Wednesday's close after the People's Bank of China (PBOC) fixed the official daily midpoint at 6.1720, or 0.11 percent weaker than Tuesday's fix. China historically has managed its exchange rate, keeping it below equilibrium level for many years in order to make its exports more competitive, U.S. Federal Reserve Chairman Ben Bernanke said in his testimony on monetary policy to a congressional Committee on Wednesday. The IMF's latest report on China, published on Wednesday, said that the yuan was moderately undervalued against a broad basket of currencies. "No surprise from Bernanke or IMF comments, and the yuan's movements today simply shrugged them off," said a dealer at a European bank in Shanghai, repeating a forecast by many traders that the yuan is likely to remain largely flat or fall slightly in the near term, hit by China's weakening exports. The PBOC has let the yuan rise and fall moderately since early June amid a slowdown in economic growth after it allowed a relatively strong rally in the currency in April and May.
The onshore spot yuan market at a glance:
Item Current Previous Change PBOC midpoint 6.1720 6.1652 -0.11% Spot yuan 6.1396 6.1353 -0.07% Divergence from -0.52%
Spot change ytd +1.48% Spot change since 2005 revaluation +34.81% *Divergence of the dollar/yuan exchange rate. Negative number
indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 1 percent from official midpoint rate it sets each morning.
OFFSHORE CNH MARKET The most recent CNH Tracker column, following the offshore yuan market, can be downloaded here: http://link.reuters.com/ser59t
The offshore yuan market at a glance:
Instrument Current Difference from onshore Offshore spot yuan 6.1409 -0.02%* Offshore non-deliverable 6.2776 -1.68%**
*Premium for offshore spot over onshore
**Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. .
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> RECENT DEVELOPMENTS - ANALYSIS-China exports slide raises doubts about currency policy - CHINA MONEY-Faltering exports could mean flat yuan or worse in H2 - Yuan rally starts to fade as capital inflows to China slow
- ANALYSIS-Bullish yuan herd leaves China fundamentals in the dust - Currency war or no, Beijing doesn't want Asia to take stable yuan for granted - China opens new front in money war as yuan speculation distorts export data
KEY DATA POINTS - Gap between PBOC midpoint and spot rate is narrowing. GRAPHIC: http://link.reuters.com/qyx74t - China's trade surpluses mainly driven by weak imports rather than strong exports. GRAPHIC: http://link.reuters.com/qav68s - Corporate FX purchases in May show reduction in yuan appreciation expectations. GRAPHIC: http://link.reuters.com/tyx74t - Hot money inflows turn to outflows in May GRAPHIC: http://link.reuters.com/saz74t - Despite relatively stable dollar/yuan exchange rate, the yuan is appreciating on a trade-weighted basis. GRAPHIC: http://link.reuters.com/sed74t
(Editing by Richard Borsuk)