China’s yuan depreciation down to ‘short-term pressure’, says Beijing, economic fundamentals offer future support

China’s yuan is around 6.9 per cent weaker against the US dollar than it was a year ago, sparking growing capital outflow fears amid a weakening economy

But the medium- to long-term future of the currency will be ‘supported by solid underlying fundamentals’, said a newspaper affiliated with the central bank

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The yuan is around 6.9 per cent weaker against the US dollar than it was a year ago. Photo: EPA-EFE

Published: 8:15pm, 17 Aug 2023

Beijing has attempted to strike a positive note for the fast depreciating yuan, claiming it is as a result of “short-term pressure”, adding that the Chinese currency has solid support from economic fundamentals.

The yuan is around 6.9 per cent weaker against the US dollar than it was a year ago.

The offshore rate has plunged to a nine-month low of 7.34 against the US dollar, while its onshore counterpart also dropped to its lowest level since November at 7.29.

The depreciation has sparked growing capital outflow fears, and as China’s economic recovery gradually loses steam, market worries have risen over the country’s growth prospects, which further dimmed after July’s disappointing economic data.

The Chinese yuan will continue to maintain a fundamentally stable position around a reasonable and balanced level

Financial News

“The recent weakening of the Chinese yuan against the US dollar is primarily due to short-term pressures,” according to an article published on Wednesday by the Financial News, a newspaper affiliated with the People’s Bank of China (PBOC).