SHANGHAI (Reuters) - Currency dealers refrained from trading the Chinese yuan against the Singapore dollar on Monday morning due to an incorrect midpoint fix SGDCNY=PBOC before the market opened.
The People’s Bank of China later adjusted the midpoint, but as of midday there had been no trades in the two currencies on China’s interbank market.
The yuan’s midpoint was initially set at 4.9929 per Singapore dollar, far weaker than Friday’s closing rate of 4.8418. The PBOC later amended the daily midpoint on the official foreign exchange trading platform website, re-setting it at 4.8391.
The PBOC fixes a midpoint based on levels rates submitted by some banks, but suspicions arose at Monday’s fixing that some banks submitted incorrect rates.
Under China’s currency regime the exchange rate is permitted to deviate two percent either side of the daily mid-point.
China Foreign Exchange Trade System (CFETS) did not immediately comment on the issue when contacted by Reuters.
The Singapore dollar accounts for 3.21 percent in the CFETS trade weighted basket for the yuan.
Reporting by Hong Kong Newsroom; Editing by Simon Cameron-Moore