Various Chinese state media outlets are bailing out the yuan, the local currency, after the recent devaluation, proving that the country’s strong exports should offset a stronger dollar and a hawkish Federal Reserve rate hike. Reuters.
The official Shanghai Securities News quoted analysts as saying, “China’s strong trade surplus should continue to provide support, as the conversion of foreign exchange earnings by exporters will be important for stabilizing the exchange rate. Factors.”
“A moderate depreciation of the RMB is conducive to maintaining export competitiveness against the backdrop of the global economic downturn, and is of positive significance to maintaining the economy operating within a reasonable range”, “Securities Times”
USD/CNY was up 0.42% on the day at 6.8636 at the time of writing. Earlier in the day, the pair touched 6.8676, its highest level since August 2020. The yuan has fallen more than 1.6% against the dollar since the People’s Bank of China (PBOC) surprised markets by cutting two key interest rates in the past week, widening the monetary policy divergence with the Federal Reserve.
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