The Chinese yuan rose against the U.S. dollar on Tuesday, reversing its early decline, as China loosened controls over banks' foreign-exchange positions, to further liberalise the currency market.
China's State Administration of Foreign Exchange said that it would replace daily caps on banks' foreign exchange positions with weekly limits from January 1, giving more flexibilty over banks' yuan trading.
Chinese banks' net currency positions would not be constrained by loan-to-deposit ratios from January 1, it added.
The yuan advanced to 6.1977 against the greenback, from an early new 6-month low of 6.2342. The next possible resistance for the yuan is seen around the 6.187 mark.
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