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Yuan's Direction Depends On China's Economic Performance - Guan Tao

MNI (Singapore)

The rise and fall of the yuan depend on China’s economic fundamentals, and is not dependent on the strength of the U.S. dollar nor the China-U.S. interest rate spread, wrote Guan Tao, a former senior State Administration of Foreign Exchange official in a blog post. Though the market generally expects a better economic outlook next year, with some predicting a strong rebound in yuan, there will still be many uncertainties, said Guan. With external demand likely to weaken, relaxing Covid controls may not quickly lead to the rebound in consumption and investment given damage to balance sheets of companies and the household sector. It remains to be seen whether the property market can recover as expected amid declining social purchasing power and strong wait-and-see sentiment in the market, said Guan.

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