Agencies
New York
China has for long been promoting yuan as a formidable global tradeable currency, but in recent times it has not been able to match the soaring value and worth of the US dollar. The volatility, low returns, and unexpected shift in external demand for yuan has prompted the Chinese exporters to shift their loyalty to the US dollar.
Chinese traders have read the market condition well and are certain of yuan’s depreciation against the dollar. US dollar has been performing well at the global stage and the US Federal Reserve has defined expectations and refrained from downgrading its interest rates due to looming inflation threat.
The Chinese exporters are investing their capital in US assets for better returns. This perhaps is a negative trend for China and is a result of recent dwindling export numbers. China’s exports have declined by 7.5 percent in March this year in comparison to 2023, not what was expected. The export growth trend in January and February 2023 was 7.1 percent.
The value of yuan has also dropped 2.1 percent against the US dollar at the beginning of 2024, giving the Chinese exporters enough reasons to park their capital in the dollar amount and put their foreign trade receivables inHong Kong.
