BEIJING, March 21 (Xinhua) -- The central parity rate of the Chinese currency renminbi, or the yuan, on Friday depreciated for a fourth straight day against the U.S. dollar to its weakest point in more than four months.
The yuan weakened 15 basis points to 6.1475 against the U.S. dollar on Friday, according to the China Foreign Exchange Trading System.
Experts attributed the yuan's decline mostly to the new U.S. stance on its QE policy.
Federal Reserve Chair Janet Yellen said on Wednesday that the Fed will probably end its massive bond-buying program this fall, and could start raising interest rates around six months later.
Wang Hongying, deputy head of China International Futures Co., Ltd., said the Federal Reserves' policy change indicates that the United States has achieved substantial recovery in its real economy, which means the greenback is poised to enter an appreciating cycle.
"The accelerated reflux of U.S. dollars is likely to quicken the depreciating trend of the yuan in the short term, although the risk is controllable," Wang added.
This came after the People's Bank of China, the central bank, widened the yuan's daily trading band in the interbank spot exchange market from 1 percent to 2 percent on Monday.
The move is aimed at enhancing the exchange rate's floating flexibility, facilitating its economic restructuring and beefing up the market's decisive role in allocating resources, the central bank said.
Xie Yaxuan, an analyst at China Merchants Securities, expects the yuan to face the first major test after the band-widening, highlighting Yellen's new wording on the possibility of raising interest rates.
However, the depreciation of the yuan might just be short-term and is unlikely to have a major impact on China's international trade and real economy, according to Wang.
The yuan exchange rate fluctuations might also serve as a silver lining for Chinese companies and banks, encouraging them to be more proactive in managing exchange rate risks, the official added.
The yuan's value came under the spotlight as its exchange rate against the U.S. dollar declined 0.4 percent in the first two months this year, a period in which the country also saw a shrinking trade surplus.
From the launch of the yuan's exchange rate reform in 2005 to the end of last year, the currency appreciated by 35.75 percent against the U.S. dollar, resulting in the currency's "effective" exchange rate rising 42.21 percent, official data showed.