THE LEADING EXPERTS IN DESIGN AND MANUFACTURE CUSTOM GARMENTS
2022-08-24 11:24:38
The onshore and offshore yuan continued to weaken against the US dollar on August 22, after depreciating by more than 1% last week.
On August 22, after opening at 6.8202, the spot exchange rate of the RMB against the US dollar fell below 6.83 and 6.84 successively, and closed at 6.8384 as low as 6.8420 at 16:30, down 296 basis points from the previous trading day. The closing price also marked a new low since Sept. 10, 2020.
"In recent trading days, the spot price of the renminbi against the dollar is followed by the central parity rate lowered and weakened significantly, the dollar index continues to rise, coupled with domestic interest rate cuts, the renminbi naturally under pressure." A foreign exchange trader at a state-owned bank said. By the end of the day on Aug. 22, the yuan's spot exchange rate against the dollar had fallen by more than 7.3%. The central parity rate of the yuan against the dollar has fallen 6.97% this year; The offshore yuan, which reflects international investors' expectations, has fallen more than 7.7 percent against the dollar this year, falling below 6.86 on Aug. 22.
In the background of domestic interest rate cuts, the market is also concerned about the depreciation of the renminbi exchange rate.
On August 22, the latest market quoted rates (LPR) for loans were 3.65% for one-year terms, a reduction of 5 basis points, and 4.3% for maturities over five years, a reduction of 15 basis points.
"Under the background of the high probability that the US dollar will continue to be strong until the end of the Fed interest rate hike, the lifting of energy risks in Europe, and the weakening of trade boost, if the interest rate cut cycle starts, the short-term depreciation pressure of the RMB exchange rate will be more significant." China Merchants Securities pointed out in its latest research report that the LPR was not lowered more significantly in August, "reflecting the central bank's management of the RMB exchange rate depreciation expectation".
中文
