Renminbi rate gap persists as offshore rate stays weaker

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The onshore renminbi remained stronger than the offshore renminbi on Wednesday, holding the two rates back in their traditional positions after months of the reverse.

The onshore renminbi weakened 0.1 per cent to Rmb6.8977 while the offshore renminbi, was trading flat at Rmb6.9025 after snapping a six-day losing streak yesterday and closing up 0.1 per cent.

The onshore rate was weaker despite the People’s Bank of China having set the midpoint around which the onshore renminbi can trade 2 per cent in either direction at Rmb6.89400 on Wednesday, 0.02 per cent stronger than on Tuesday.

This sees the two rates hold in the traditional positions with the offshore rate weaker than its onshore cousin, a state that was restored on Monday. A softer offshore rate has typically been viewed by investors as signalling further weakness for the more tightly managed onshore rate.

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