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©Reuters. The yuan falls from 7 units per dollar for the first time in more than two years
Shanghai (China), Sep 16 (.).- The yuan, China’s official currency, fell below the psychological barrier of 7 units per dollar for the first time since August 2019 due to the slowdown in the national economy and the aggressive rate hikes by the US Federal Reserve (Fed) to tackle inflation.
According to the South China Morning Post, each dollar was exchanged this morning for 7.0066 yuan at the ‘onshore’ exchange, that is, the one operated in the local markets, in which at the close of yesterday the rate was 6.9775.
That the ‘onshore’ rate rises is a sign that the renminbi (official name of the currency) is weakening, since it is more expensive for holders of yuan to buy dollars.
The last time the yuan’s onshore exchange rate against the dollar passed 7 integers was in July 2020.
For its part, the ‘offshore’ rate – the one negotiated in international markets such as Hong Kong – had already exceeded that level this Thursday.
Meanwhile, the official exchange rate set every day by the People’s Bank of China (PBC, central) is still below, since today it stood at 6.9305 yuan for each dollar.
The official exchange rate of the BPC is key to the price of the ‘onshore’ rate, whose price can only deviate by a maximum range of 2%, both when it is revalued and when it is devalued.
China Minseng Bank Chief Economist Wen Bin said the yuan’s weakness is directly related to the Fed’s interest rate adjustments and the ensuing strength of the , which is lifting the value of the US currency against multiple currencies. world markets, including the euro.
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