The Chinese yuan is strengthening midweek against its American counterpart, despite warnings from officials about the national economy. The Chinese economy was a key subject of discussion at this yearâs annual World Economic Forum (WEF) in Tianjin. This comes as the worldâs two largest economies slapped tariffs on both of their exports on Tuesday.
Speaking at the WEF, Chinese Premier Li Keqiang explained that the government understands that the nation faces a wide array of economic challenges and difficulties. Li noted that because China is ingrained in the global economy, it is impacted by international trends.
Deeply integrated into the world economy, the Chinese economy is inevitably affected by notable changes in the global economic and trade context. Indeed, we’re facing greater difficulties in keeping stable performance of the Chinese economy.
While China faces a tough economic situation, Li revealed that his country is still comfortable with the current developments. He added that the government and the central bank have policy tools aimed to âboost Chinaâs resilience to cope with various challenges and difficulties.â
The second-in-command insisted that the country will not devalue its currency during its trade dispute with the US. A weaker currency will make exports cheaper, something that President Donald Trump and his administration accused Beijing of doing, which Trump contends ârips offâ the US.
Recent fluctuations in the renminbi exchange rate have been seen as an intentional measure, but that isnât true. One-way devaluation will do more harm than good to Chinaâs economy. China will by no means stimulate exports by devaluing the yuan.
Experts believe that the yuan has likely bottomed out, and that it will maintain a sideway direction for months because central bank measures will offer support, but global uncertainties and volatilities will affect the yuan.
The USD/CNY tumbled 0.16% to 6.8504, from an opening of 6.8612, at 16:36 GMT on Wednesday. The EUR/CNY was unchanged at 8.0057.
If you have any questions, comments or opinions regarding the Chinese Yuan,
feel free to post them using the commentary form below.
Be First to Comment