China's yuan depreciates to its lowest level in 14 years

中 성장률 전망치 대폭 하향에 위안화 가치 14년여 만에 최저로 추락

Most global currencies have depreciated significantly against the U.S. dollar in recent weeks,... and that even included China's yuan,... which is now at a 14-year low against the greenback.
This and other factors have some market watchers in China concerned that bumpy times are on the horizon for the world's second biggest economy.
Lee Seung-jae has more.


The Chinese yuan on Wednesday,... fell to a 14-year low against the U.S. dollar,... despite efforts by China's central bank to stem the slide after U.S. interest rate hikes prompted traders to convert money into dollars in search of higher returns.
The yuan fell to 7-point-23 against the dollar, its lowest level since January 2008.
While a weaker yuan helps Chinese exporters by making their goods cheaper abroad,... it also encourages capital to flow out of the economy.
This would then raise costs for Chinese borrowers and set back the ruling Communist Party's efforts to boost weak economic growth.
In fact,... the World Bank earlier this week lowered the 2022 GDP growth outlook for China.
In its biannual report released on Tuesday,... the annual growth outlook for East Asia and the Pacific region had been downgraded from 5-percent to 3-point-2 percent,... with much of the decline due to China.
The World Bank estimates GDP growth for the world's second-biggest economy to grow just 2-point-8 percent,... while the rest of the 23-country region was expected to grow 5-point-3 on average.
The yuan,... much like other currencies,... is expected to decline even further,... with some predicting it to fall to 7 yuan for one dollar.
This,... as U.S. Fed commented that more rate hikes can be expected in order to cool inflation,... which has already reached a 4-decade high.
China's deputy central bank governor, Liu Guoqiang, held a video meeting with Chinese bankers on Wednesday,... calling on them to "maintain the basic stability of the exchange rate,"... while warning bankers against betting on the yuan rising or falling.
Lee Seung-jae, Arirang News.

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2022-09-29, 11:00 (KST)