Chinese yuan internationalization remains

Investors have to accept that more volatile and possibly weaker RMB to USD as the new “normal”.

Amid its slowing economy, China must pursue its path of currency internationalization.

6 April 2016

HSBC analyst sees renminbi down 6% by year-end

The Chinese renminbi is likely to further weaken to 6.9 against the US dollar by the end of the year, an HSBC currency analyst said.

Such an exchange rate represents a plunge of over 6 percent from the currency’s closing rate of 6.4732 onshore on Tuesday, the Hong Kong Economic Journal reports, citing Paul Mackel, head of emerging market currency research at HSBC Global Banking and Markets.

The expected decline will result from the decoupling in monetary policies between China and the United States with the latter pursuing its rate hike cycle, Mackel said.

The HSBC analyst, however, does not foresee another devaluation similar to the 2 percent cut in the renminbi exchange rate initiated by the Chinese central bank in August last year.

Mackel said the renminbi is turning into an anchor currency in Asia in view of its inclusion in the currencies the International Monetary Fund uses for its special drawing rights and the new basket of currencies that the renminbi uses as reference for its exchange rate.

Although the Chinese economy is slowing down and the renminbi is depreciating, the internationalization of the currency is sustaining, he added.

Source: EJinsight.com

More Related News:

  • Currency War? Sudden fall of China’s yuan to 4-yr lowAugust 13, 2015 Currency War? Sudden fall of China’s yuan to 4-yr low China’s surprise currency devaluation is likely an administrative tool to boost Chinese exports.   The ripple effect of currency fell was bigger than expected. Many Asian […]
  • DBS predicts RMB depreciation continues in 2016November 11, 2015 DBS predicts RMB depreciation continues in 2016 DBS Bank research: China yuan is likely to soften up to 5% by 2016 amid slowing economy growth. DBS (HK) analysis expected that International Monetary Fund (IMF) setting to […]
  • Positive impact on HK economy amid RMB depreciationOctober 6, 2015 Positive impact on HK economy amid RMB depreciation RMB depreciation may have a positive impact on Hong Kong’s economy and trade, according to Hang Seng Bank's expectation. Hang Seng Bank (00011.HK)'s Hong Kong Economic Journal (Sept/ […]
  • China’s yuan continues on downward trackJanuary 7, 2016 China’s yuan continues on downward track Chinese currency’s offshore exchange rate hit a 5 years (6 January). China's yuan would depreciate as much as 15% to 7.30 against the US dollar in 2016, reported the Hong Kong […]