Weaker Yuan Trend Seen Continuing In H2 - CF40 Report

The yuan is expected to continue to depreciate against the U.S. dollar in H2 2022, though it is likely to be a moderate, orderly and controllable process, wrote China Finance 40 Forum, a prominent think tank, citing market analysts. The People’s Bank of China will probably refrain from intervening in the currency unless a disorderly or panic-driven devaluation trend takes hold. The analysts also noted that the central bank's recent rate cuts highlighted its priority of maintaining monetary policy independence as it looks to boost economic growth, which indicates the yuan will remain more flexible. Currently, the yuan has shown relative resilience against the dollar when compared to other currencies, owing to China's robust trade exports, analysts noted.