(Bloomberg) -- China set its reference rate for the yuan at a stronger-than-expected level, after the currency posted its biggest monthly decline on record as Covid-led restrictions continue to weigh on the economy.

The People’s Bank of China set the fixing at 6.5672 per dollar, compared with the average estimate of 6.5699 in a Bloomberg survey of analysts and traders. China’s financial markets reopened Thursday after a three-day break.

The offshore and onshore yuan fell more than 4% against the dollar in April, marking their worst declines on record. 

Their steep declines come as strict lockdowns in Shanghai and restrictions in several Chinese cities, including Beijing, to curb the spread of Covid infections takes a toll on the economy. The central bank has so far refrained from heavy-handed moves to intervene, relying instead on guiding the market with the fixing and cutting foreign-exchange reserve requirements to slow the currency’s rapid slump. 

Despite such measures, the yuan remains under pressure. Banks including Credit Agricole CIB and Standard Chartered Bank Plc. have recently slashed their forecasts for the yuan. 

The fixing limits the onshore yuan’s moves by 2% on either side.


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