Exchange Rate in China
China - Exchange Rate
Central Bank intervention and upcoming trade talks halt the yuan’s slide
Measures implemented by the People’s Bank of China (PBOC) and trade talks between China and the United States scheduled for late August tamed the sharp depreciation of the yuan that started in April and accelerated in June. On 17 August, the yuan closed the day at 6.88 CNY per USD, which represented a weakening of 2.6% over the same day of the previous month. While the yuan has lost a relatively moderate 3.0% against the greenback compared to the same day last year, it has weakened 9.6% since April.
The slide of the yuan mostly reflects escalating trade tensions with the U.S. and cooling economic growth due to the government’s campaign to curb shadow banking and support financial deleveraging. Monetary tightening in the United States is also spurring capital outflows from emerging markets, adding further pressure on the yuan. Moreover, some analysts are speculating whether Chinese authorities are allowing the yuan to weaken to bolster the external sector in a context of subdued inflationary pressures and rising trade protectionism. Nevertheless, news that China and the U.S. will resume trade talks in late August halted the depreciation of the yuan in recent days. Furthermore, the yuan benefited from the PBOC decision to set its daily reference rates stronger in mid-August, preventing the yuan from declining further as the currency fluctuates by 2% around the daily fixing. Also, the PBOC initiative to set a reserve requirement of 20% on commercial banks’ purchase of foreign-exchange forwards supported the yuan.
China Exchange Rate Forecast
FocusEconomics Consensus Forecast panelists expect the Chinese yuan to trade at 6.72 per USD at the end of 2018. For 2019, the panel projects that the CNY will trade at 6.62 per USD.
China - Exchange Rate Data
|Exchange Rate (vs USD)||6.05||6.21||6.49||6.95||6.51|
5 years of economic forecasts for more than 30 economic indicators.
China Exchange Rate Chart
Source: Thomson Reuters.
|Bond Yield||3.68||-0.40 %||Sep 14|
|Exchange Rate||6.87||-0.19 %||Sep 14|
|Stock Market||2,682||-0.34 %||Sep 14|
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September 15, 2018
House prices in 70 large- and medium-sized cities rose 1.4% in August in month-on-month terms according to a weighted average index calculated by Thomson Reuters from data issued by the National Bureau of Statistics (NBS).
September 14, 2018
Industrial production expanded 6.1% annually in August, slightly above July’s 6.0% and matching market expectations. August’s print reflected an acceleration in electricity generation and mining output, while manufacturing production growth edged down. On a month-on-month basis, industrial production increased 0.52% in seasonally-adjusted terms in August, above July’s 0.47% expansion.
September 14, 2018
Urban fixed asset investment in China expanded 5.3% annually in the first eight months of the year, marking the lowest print on record since the early 1990s.
September 14, 2018
In August, nominal retail sales grew 9.0% on an annual basis, a slight acceleration from the 8.8% expansion registered in July.
September 12, 2018
In August, Chinese banks distributed CNY 1.28 trillion (USD 190 billion) in new yuan loans, down from the CNY 1.45 trillion distributed in July but above market expectations of CNY 1.04 trillion.