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Report: USD rate in China too exceed CNY 7 - ANALYSIS

Report: USD rate in China too exceed CNY 7 - ANALYSIS
China seems uninterested in keeping exchange rate of national currency stable

Baku. 15 October. REPORT.AZ/ In spite of thunderous statements of China and U.S. that the exchange rate of Chinese national currency will be stable, the CNY rate against foreign currencies, including USD continues to fall.

Report’s analytical group thinks that the CNY/USD rate, which is currently 6.92, will exceed 7 soon.

Notably, last week U.S. Treasury Secretary Steven Mnuchin  said the National Bank of China promised to keep the exchange rate of yuan stable: "Depreciation of yuan does not meet China’s interests and  the People's Bank of China realizes that."

Yi Gang, the Governor of the People's Bank of China, said the exchange rate of yuan will remain stable: "We promise to keep the exchange rate stable. We don’t want depreciation of yuan to prevent our trade operations."

All these statements were made at the meeting jointly held by World Bank and IMF. The event was organized to reduce tension between the two leading economies of the world.

However, it seems that the USD rate is increasing in China. Since early 2018, yuan has depreciated by 6.3% against USD. During the past week, the depreciation made up 0.02 yuan or 0.3% and this tendency is going on.

Report’s analytical group thinks that China will not keep its word to keep the exchange rate stable. Because this leads to spending of China’s currency reserves. In addition, it’s not persuasive that the Eastern Asian country will prepare new economic program. Therefore, USD rate in China may reach CNY 7, even CNY 7.15-7.2 within a month. 

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