Yuan at a Crossroads as Covid Outbreak Threatens Growth
- Pace of yuan depreciation to be controlled by PBOC: BOCOM Intl
- Yuan seen falling to 6.6 per dollar by year-end: BNP Paribas
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The yuan is setting course to depreciate this year as risks to economic growth put an end to two straight years of gains.
The resurgence of Covid lockdowns and surging commodity prices are spurring doubts over China’s 5.5% growth target this year. The prospect of further monetary easing at a time when global central banks hike rates is set to accelerate outflows and further undermine the yuan. The People’s Bank of China’s tolerance for yuan strength also is wearing thin. It made the biggest push to weaken the currency through fixings last week.