China's yuan has fallen to the lowest rate since 2014 by one measure, and Beijing is OK with that for now, FX strategist says
China's yuan has fallen to the lowest rate in nearly a decade by one measure, and Beijing is OK with that for now, according to a foreign exchange strategist.disappointing post-COVID economic recoveryThe nominal rate is also at a 2022 low compared to the China Foreign Exchange Trade System currency basket, which is managed by the People's Bank of China.
However, expectations of economic stimulus from Beijing could lift the yuan, Trang added. Markets got an early hint of what may be on the way when China's central bank announced a surprise cut to key interest rates on Tuesday. "So I really think that the story from here is the China stimulus and the fact that RMB has already weakened a lot on a basket basis," Trang said."And there's thought to be a bit of value there on a technical basis."
But Trang said she noticed that the central bank appears to be more open to the yuan depreciating instead of trying to push it higher with its daily rate fixes.
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