In light of China’s struggling property market and the strength of the US dollar, the yuan has experienced a significant weakening, edging closer towards the lower limit of its fixed trading band with the dollar. The aftermath of the property crisis and the strengthening dollar have collectively dealt a blow to the already beleaguered Chinese currency. This week, the onshore yuan fell to a level that was over 1.9% weaker than the daily reference rate set by the People’s Bank of China, which only permits a 2% variation on either side. This decline on Monday brought the yuan closest to the lower limit of the trading band since October of last year.
The property crisis in China, combined with the increased strength of the US dollar, has severely impacted the yuan. As the Chinese property market worsens, the value of the currency diminishes further. This week, the onshore yuan weakened to a level that exceeded 1.9% below the daily reference rate set by China’s central bank. This decline is significant as it approaches the lower limit of the trading band, which has not been seen since last October. The currency’s weakened position is a result of the dual pressures exerted by the property crisis and the stronger dollar, leaving the yuan in a precarious state.
As the property crisis deepens in China and the US dollar gains strength, the yuan has been dealt a double blow. The onshore yuan’s value has been gradually declining, and this week it weakened to a level that surpassed 1.9% below the daily reference rate set by the People’s Bank of China. The currency is approaching the lower limit of the trading band, marking a significant drop since last October. The property market’s deterioration in China has contributed to the yuan’s decline, along with the influence of the stronger US dollar. These factors together have left the yuan in a vulnerable position and raised concerns about its stability.