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Could China′s yuan depreciate further？
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China′s currency，... the yuan，... recently hit a four－and－a－half year low against the U.S. dollar.
And with the policies Beijing has instituted，... it is expected to keep weakening.
Kim Min－ji explains how this trend could hurt Korea′s exporters.
Will the Chinese yuan depreciate further down the road？
According to a Bloomberg survey of 64 foreign investment banks，... the yuan is expected to trade at an average of 6－point－61 against the U.S. dollar at the end of next year.
That means， on－year， the Chinese currency is forecast to lose 2－point－3 percent of its value.
On Tuesday，... the yuan weakened against the dollar，... after the central bank set its official midpoint at its lowest level in more than four years.
China also announced that it intends to depeg the currency from the dollar... and instead link it to a basket of 13 currencies， including the dollar， euro and yen which would give it room to fall further.
The move is widely seen as an attempt to manage the yuan′s value against the greenback ahead of a widely expected U.S. rate hike this week as a stronger dollar would， in turn， raise the value of the yuan.
But some analysts warn that a further decline in the yuan′s value could hurt countries that compete with China on the trade front... and push other nations to weaken their currencies in order to keep up.
″If the yuan weakens further，... it will reduce exports to China，... as well as hurt the price competitiveness of exporters that compete with China in third countries. It could also push other countries to devalue their currencies， including Korea.″
Analysts add that while China is expected to maintain its loose monetary policy，... it won′t intervene in devaluing its currency，... so while the yuan is expected to maintain its downward slide，... there won′t be any drastic drops.
Kim Min－ji， Arirang News.
Visit ‘Arirang News’ Official Facebook Page
China′s currency，... the yuan，... recently hit a four－and－a－half year low against the U.S. dollar.
And with the policies Beijing has instituted，... it is expected to keep weakening.
Kim Min－ji explains how this trend could hurt Korea′s exporters.
Will the Chinese yuan depreciate further down the road？
According to a Bloomberg survey of 64 foreign investment banks，... the yuan is expected to trade at an average of 6－point－61 against the U.S. dollar at the end of next year.
That means， on－year， the Chinese currency is forecast to lose 2－point－3 percent of its value.
On Tuesday，... the yuan weakened against the dollar，... after the central bank set its official midpoint at its lowest level in more than four years.
China also announced that it intends to depeg the currency from the dollar... and instead link it to a basket of 13 currencies， including the dollar， euro and yen which would give it room to fall further.
The move is widely seen as an attempt to manage the yuan′s value against the greenback ahead of a widely expected U.S. rate hike this week as a stronger dollar would， in turn， raise the value of the yuan.
But some analysts warn that a further decline in the yuan′s value could hurt countries that compete with China on the trade front... and push other nations to weaken their currencies in order to keep up.
″If the yuan weakens further，... it will reduce exports to China，... as well as hurt the price competitiveness of exporters that compete with China in third countries. It could also push other countries to devalue their currencies， including Korea.″
Analysts add that while China is expected to maintain its loose monetary policy，... it won′t intervene in devaluing its currency，... so while the yuan is expected to maintain its downward slide，... there won′t be any drastic drops.
Kim Min－ji， Arirang News.
Visit ‘Arirang News’ Official Facebook Page