This may not surprise many in the political front but China is seen deliberately letting the value of its Yuan fall, against a dollar. This move is interpreted by the ING Bank, as retaliation to the President of the United States, Donald Trump.
China is consistently blamed for artificially weakening the value of Yuan to export goods at a better price, allowing more foreign currency into the country. International trade remains closely looked after, by the government.
The variations in the currency value has been depleted over the past couple of years, as is observed by ING Bank owing to the modifications in the currency policy introduced by the People’s Bank of China, the country’s central bank.
There have been minor variations in the value of Yuan so far this year, depleting twice in the last two months, but growing significantly in the earlier two.
So far this month Yuan has been trading at 6.7405 against a dollar and depleting since this afternoon in Asia. According to ING’s economist for Greater China Iris Pang, this is perhaps an attempt to demarcate the stagnant effect of foreign countries upon China’s Yuan policy. This clearly hints towards China’s retaliation against Trump’s condition regarding Yuan’s depreciation for there to be a U.S.-China trade deal.
The upcoming meet between the two parties in Beijing looks to resolve this trade war between the two superpowers. There is an observable positive fervor about this meeting, but leaves the experts uncertain about the period when the deal could actually pass. Guesses have been made to be within the week, to even a few months.
Pang says that any appreciation in Yuan’s value, however, would be unlikely since it will not politically benefit the country, and moreover, come off as China folding against U.S. pressure.
The moderate fluctuations will continue, according to ING, and they have projected the value of Yuan to be 6.75 against a dollar, at the end of the year circling the aggregate growth of 2.62% for Yuan during the year.