Thursday, January 17, 2019 6:25:39 PM- Nigerian Stock Exchange.

  Chinese Yuan weakens: Deliberate attempt of PBoC to rearm the economy in case trade war between US and China intensifies?


25 June 2018 ( Lagos): The other major headline in the FX markets is news of the Chinese Yuan weakening to its lowest level since December 2017. Fears over the possible ramifications that a trade war between the United States and China would have on the Chinese currency appear to have encouraged the Yuan to withdraw its previous gains in 2018 against the Dollar. The Yuan has now lost nearly 0.3% year-to-date, where it was previously seen as one of the best performing emerging market currencies this year.


There is speculation that the People’s Bank of China (PBoC) might be deliberately weakening the Yuan in an effort to strengthen the Chinese economy, in the event that the world’s two largest economies do actually get involved in a trade war. The central bank reduced the reserve ratio requirement for commercial banks by half a percentage point over the weekend, which some have attributed to providing the local economy with some ammunition should the trade war concerns with the United States intensify.

Source: Jameel Ahmad, Global Head of Currency Strategy & Market Research at FXTM and Lukman Otunuga , Research Analyst at FXTM

Reporting for EasyKobo on Monday, 25 June 2018 in Lagos, Nigeria

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