SOURCE / ECONOMY
China’s yuan weakens to four-month low against US dollar
Published: Mar 31, 2021 06:08 PM
A bank staff member checks RMB banknotes at a bank in Lianyungang, east China's Jiangsu Province, Jan. 7, 2016.Photo:Xinhua

A bank staff member checks RMB banknotes at a bank in Lianyungang, east China's Jiangsu Province, Jan. 7, 2016.Photo:Xinhua



 The Chinese yuan weakened to a four-month low against the US dollar on Wednesday. According to data released by the People's Bank of China (PBC), China's central bank, the yuan's central parity exchange rate against the greenback stood at 6.5713 on Wednesday, after falling for six consecutive trading sessions to hit the lowest level since December 2020.

The decline comes after its peak in January, when the Chinese yuan rose to the highest point in 31 months against the US dollar at 6.4605, due to China's strong economic rebound and the continuing depreciation of the US dollar.

Dong Dengxin, director of the Financial Securities Institute at Wuhan University of Science and Technology, said that yuan's decline was partly a result of the normal fluctuation of the yuan exchange rate. 

"Macroeconomic situation in China remains unchanged. It is possible that the yuan has entered a period of correction after a strong surge earlier this year," Dong told the Global Times on Wednesday.

He predicted that this round of retreat may last for a month before stabilizing at the exchange rate of 6.6-6.7 against the dollar.

Despite the recent decline in the RMB exchange rate, the currency stands strong compared with other currencies. 

Since the beginning of this year the yuan has fallen 0.36 percent. In comparison the Japanese yen has dropped more than 5.7 percent. South Korean won and the euro have fallen more than 4 percent and 3.5 percent, respectively.

The overall willingness to settle foreign exchange is high, which has become an important factor in supporting the stability of the exchange rate, experts said.

Data released by the State Administration of Foreign Exchange previously showed that volumes of activity in spot, forward, and futures markets from December to February of this year was close to $170billion.


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