The central parity rate of the Chinese currency weakened against the U.S. dollar for a fourth trading day in a row Thursday.
The central parity rate of the yuan weakened 62 basis points to 6.3732 against the dollar, according to the China Foreign Exchange Trade System (CFETS).
It is the weakest level since late January, the CFETS data showed.
Analysts attributed the recent depreciation to the dollar’s strengthening during the three-day International Workers’ Day holiday, when the onshore yuan trading stopped.
The dollar index, which measures the greenback against six major currencies, rose above 92 on Tuesday as the market expects more interest rate hikes in the United States.
“The yuan’s correction was normal after an appreciation at the beginning of this year,” said Fan Ruoying, a researcher with the Bank of China.
The yuan’s central parity rate strengthened 3.9 percent against the dollar in the first quarter and 3.2 percent in January alone, according to statistics from the country’s foreign exchange regulator.
In China’s spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.
The central parity rate of the yuan against the dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.