The yuan plummets to 16-year lows against the dollar on doubts about the Chinese economy

The yuan, the Chinese currency, reached its lowest levels against the dollar this week for 16 years, a fall that analysts cited by the local press attribute to doubts about China’s economic recovery. China and the cooling of economic activity.

The onshore exchange rate – negotiated in local markets – reached 7.3286 yuan per dollar, a level not seen since 2007, this Thursday, the day on which the Customs Administration of the Asian country reported a year-on-year drop in the export volume in August of 3.2%.

For its part, the ‘offshore’ rate – operated in international markets such as Hong Kong – reached 7.3419 yuan, marking levels of weakness very similar to those of the ‘onshore’ exchange rate.

An official who requested anonymity quoted today by the local publication Jiemian attributed the weakness of the yuan to factors such as the “market doubts about the economic recovery” of China, the “cooling of non-manufacturing business activity” or the “volatility” of the market. stock market

For its part, the National Center for Economic Research at Peking University noted in a report published this week that “recent high temperatures and extreme weather have occurred,” that “domestic demand remains insufficient” and that consumption growth “may continue to slow down” in the world’s second largest economy.

However, the official cited by Jiemian assured that “supply and demand in China’s foreign exchange market are basically stable and the resilience of foreign trade is showing signs of improvement.”

Analysts consulted by the newspaper also indicated that the Banco Popular’s (Central Bank) exchange rate management tools “remain abundant,” so “the margin for continued depreciation of the yuan is limited.”

So far this year, the yuan has fallen more than 5% against the dollar due to the slowdown in China’s economic recovery and the Asian giant’s real estate crisis.