HONG KONG — The Chinese currency slipped Tuesday in its second day of trading since Beijing promised increased flexibility in the exchange rate.
China, under pressure from governments around the globe, announced last weekend that it would proceed with a long-awaited overhaul of its currency controls after Beijing prohibited any gains against the dollar for nearly two years.
The news ignited hopes that the Chinese currency, the yuan, is on course to rise against the dollar. Many economists say the yuan is undervalued, giving Chinese goods an unfair advantage in foreign markets.
Early Tuesday, China’s central bank set a crucial daily reference rate for the yuan at its highest level in five years, up 0.4 percent from Monday and in line with that day’s gain in over-the-counter trading. By the end of Tuesday, the yuan closed down 0.2 percent at 6.8136 per dollar.
Beijing appears to be trying to balance its message.
On the one hand, it is facing considerable international pressure to permit the yuan to rise against the dollar, and an announcement Saturday that there would be more exchange-rate flexibility came just days before a meeting of the Group of 20 world leaders in Canada this week.
On the other hand, Beijing does not want to be seen at home as succumbing to pressure from abroad. The New York Times; Associated Press photo
