China's central bank lifts yuan mid-point to highest since May 2016

SHANGHAI, Jan 3 (Reuters) - China's central bank lifted its official yuan midpoint to the highest level in over 1-1/2 years to 6.4920 per dollar on Wednesday, breaching a key threshold, reflecting broad dollar weakness and solid spot yuan performance.

Wednesday's official midpoint was 159 pips, or 0.24 percent, firmer than the previous fix of 6.5079 on Tuesday and was the strongest since May 3, 2016.

The strength in the official yuan midpoint follows a weaker dollar, which fell on Tuesday to its lowest in more than three months on expectations of a slower pace of interest rate increases by the Federal Reserve.

China's yuan rose to its firmest against the U.S. dollar in nearly four months in thin trade on Tuesday, breaching the psychologically important 6.5 per dollar level. (Reporting by Winni Zhou and John Ruwitch; Editing by Sam Holmes)