On Tuesday, the Central Bank of China allowed the yuan fall of 1.9%, which was the largest devaluation of the past two decades. On Wednesday, Beijing has continued this practice, bringing the value of the national currency to the level of 6.42 yuan to the dollar.
At the same time, Beijing assured that they see no reason for further depreciation, promising to keep the yuan to ” stable and reasonable “level. The Bank of China is not explained what he meant, according to Wall Street Journal.
Currency traders interpreted Beijing’s actions as a trend, but because playing on depreciation. On foreign markets already recorded sales of 6.53 yuan to the dollar.
A number of experts believe that the Central Bank of China, having a significant foreign exchange reserves, will continue to devalue. “Further depreciation may lead to an accelerated outflow of capital and the destabilization of the financial system,” – said Craig Botham WSJ the company Schroders.
The IMF welcomed Beijing’s actions as a step to the free exchange regulation, while pointing out that much will depend on how these mechanisms will work in your life.
On the eve of the experts told Bloomberg devaluation of the yuan desire to support national exporters. Previously published data showed that China’s exports in July fell by 8.3% due to low demand from the three largest trading partners – the EU, US and Japan.
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