The offshore yuan inched higher to around 7.18 per dollar on Friday as investors digested the latest policy decision from the People’s Bank of China. As widely anticipated, the central bank kept its key lending rates at historic lows during the June rate-setting. The one-year loan prime rate was left unchanged at 3.0%, while the five-year LPR remained steady at 3.5%, following last month’s 10 bps rate cut and deposit rate reductions by major state-owned banks.
Meanwhile, investors continue to monitor ongoing tensions in the Middle East. US President Donald Trump has reportedly given Iran a final opportunity to negotiate an end to its nuclear program, delaying a decision on possible military action for up to two weeks. Elsewhere, China swiftly condemned Israel over its attack on Iran. However, Beijing has so far refrained from offering Tehran any substantial assistance beyond maintaining regular trade ties. Over the week, the currency appears to be on track for modest gains.
