Analysts pointed out several factors that have driven the yuan down. One of the most important among them is strengthening the dollar on expectations of a referendum of Britain leaving the European Union. The vote will take place on June 23.
Some analysts see the recent step to devaluate the yuan as part of its correction ahead of the possible interest rate hike by the US Federal Reserve.
In this context, the policy of the Chinese financial authorities looks controversial, Nikita Maslennikov, an analyst at the Institute for Modern Development, told Sputnik Radio.
“Analysts cannot fully understand what Beijing is doing now. On the one hand, the government has repeatedly said it wouldn’t devaluate the currency in order to maintain exports and maintain growth. At the same time, recently the Central Bank has step by step decreased the yuan exchange rate,” he pointed out.
The expert suggested that this may be a signal to the Federal Reserve to postpone raising interest rates.
Full article: Currency War? China Devaluates Yuan in Response to Western Rating Agencies (Sputnik News)