Yuan heads towards 6-year low as capital outflows fuel weakness

Beijing

THE yuan weakened towards its lowest level in six years as the US dollar strengthened and the Chinese government struggled to plug loopholes in capital controls.

The fall in the exchange rate extended a 0.3 per cent slump on Monday that was the biggest in a month. The latest data show that China's foreign exchange reserves dropped last month by the most since January while exports plunged 7.3 per cent, adding pressure for further currency weakness. The yuan slid for a sixth day against a basket of peers.