2023-08-18 21:27:00
Around 10:50 p.m., the Chinese currency gained 0.03% to 7.2845 yuan for the dollar. The day before, the currency fell to its lowest since November, at 7.3175 yuan per dollar.
The yuan somewhat halted its fall once morest the dollar on Friday as it was weighed down by gloomy indicators and the reduction of a benchmark rate by the People’s Bank of China, when bitcoin fell to its lowest since mid- June.
Around 8:50 p.m. GMT, the yuan, whose exchanges are supervised by the authorities, grabbed 0.03% to 7.2845 yuan for one dollar. The day before, the currency fell to its lowest since November, at 7.3175 yuan per dollar.
“There have been clear signs that China has sold dollars to buy yuan,” said Forexlive’s Adam Button.
“Before the intervention, there was apprehension of a devaluation of the yuan but it is clear now that China is not continuing the path of devaluing its currency,” said the analyst, adding that efforts to the Chinese Central Bank were notably motivated by “capital flight”.
The key to the weakening of the Chinese currency are “a series of disappointing economic data and negative news concerning the real estate and banking sectors”, commented Tommy Wu, an analyst at Commerzbank.
Retail sales weaker than expected in July, slowdown in industrial production: China even suspended the monthly publication of its detailed youth unemployment figures on Tuesday, following a record level in recent months.
The Chinese real estate giant Evergrande, also heavily indebted, on Thursday requested its placement in the United States under bankruptcy proceedings. The situation of the Country Garden group also worried the markets.
Their situation illustrates a real estate crisis of unprecedented magnitude, in a sector which, along with construction, has long represented a quarter of China’s GDP (Gross Domestic Product).
“Recent information has also revealed that official Chinese statistics are likely underestimating the decline in property prices,” says Tommy Wu.
Earlier in the week, the People’s Bank of China (PBoC) announced a surprise cut in one of its main interest rates (from 2.65% to 2.5%), suggesting “that the weakness of the domestic demand and rising financial risks now weigh more heavily in policy decisions than exchange rate stability,” according to ANZ analysts.
The dollar is stable once morest the euro, at 1.0872 dollars for one euro.
On the cryptocurrency side, bitcoin fell 5.30% to $26,177, losing another $1,500 following already heavy losses. The star of cryptocurrencies was dragged down by the climate of risk aversion and fell to its lowest level in two months.
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