Chinese currency’s offshore exchange rate hit a 5 years (6 January).
The Chinese currency’s offshore exchange rate weakened to 6.7319 at one point which hit a five-year low on 6 January. Meanwhile, the onshore rate slipped to 6.5616, resulting in a record high difference between the onshore and offshore exchange rates of over 0.17 percentage point.
If the RMB weakens further, the Hong Kong dollar could become the world’s strongest currency along with the US dollar, local market would stress about that.
The renminbi may depreciate as much as 15 percent to about 7.30 against the US dollar this year, the Hong Kong Economic Journal reported Thursday, citing Industrial Bank Co. Ltd. chief economist Lu Zhengwei.
The Chinese currency’s offshore exchange rate weakened to 6.7319 at one point Wednesday, a five-year low, bringing the drop in the first three trading days of the year to 2.2 percent, or over one-third of the 5.6 percent fall in the whole of 2014. The onshore rate slipped to 6.5616, resulting in a record high difference between the onshore and offshore exchange rates of over 0.17 percentage point.
Economists at foreign banks, however, are of a more conservative view, the report said, noting BNP Paribas’ estimate of a maximum decline of 5% in the renminbi exchange rate.
Wednesday’s drop in the value of the renminbi dragged down the exchange rates of many Asian currencies, also affected by volatile stock markets and the plunge in oil prices, said Tommy Ong, managing director and head of wealth management solutions for Greater China treasury and markets at DBS Bank (Hong Kong) Ltd.