China In-Focus — Yuan hits 19-month low; international travel limited

BEIJING: China’s yuan ended domestic trade at its lowest level in more than 19 months on Thursday’s expectations of aggressive US policy tightening, while prolonged COVID lockdowns hobbled the Chinese economy.

The dollar’s climb to a two-decade high followed new data showing surprisingly persistent inflation, raising investor worries that the Federal Reserve may need to accelerate policy tightening to cool prices.

Before the market opened, the People’s Bank of China set the yuan’s daily midpoint rate at 6.7292 per dollar, firmer than a Reuters forecast of 6.7362 per dollar, but still its weakest since Oct. 16, 2020.

Onshore spot yuan opened at 6.7355 per dollar and slipped as low as 6.7919 per dollar, its weakest level since Sept. 30, 2020. It finished its domestic trading session at 6.79 per dollar, its weakest such close in the same time period.

China limiting unnecessary international travel

China would “strictly limit” unnecessary travel outside the country by Chinese citizens as part of its COVID-19 response, the National Immigration Administration said in a statement on Thursday.

Officials should look to prevent COVID-19 outbreaks caused by illegal entry into China, according to the statement.

Indian tax authority froze $478 million of Xiaomi funds in February

In the income tax case, authorities blocked $478 million in February under a legal provision that allows officials to take such actions to protect New Delhi’s revenue interests, a Xiaomi court document showed.

Two sources with direct knowledge said the amount blocked by tax inspectors was a fallout of the December raids conducted at Xiaomi India offices for alleged income tax evasion.

That investigation, said one of the sources, concerns allegations the Chinese company purchased smartphones from its contract manufacturers at inflated costs in India, allowing it to record a smaller profit by selling them to customers and evading corporate income taxes.

It is not clear if the company appealed the decision.

(With input from Reuters)