« So valuation-wise, renminbi is starting to look cheap, » a Macquarie foreign exchange strategist said.
China’s yuan has fallen to the lowest rate in nearly a decade by one measure, and Beijing is OK with that for now, according to a foreign exchange strategist.
The yuan is at the lowest against the US dollar since November amid a disappointing post-COVID economic recovery.
The nominal rate is also at a 2022 low compared to the China Foreign Exchange Trade System currency basket, which is managed by the People’s Bank of China.
But based on the real effective exchange rate against another currency basket from the Bank of International Settlements, the yuan is actually at the lowest since 2014, said Trang Thuy Le, a foreign exchange strategist for Asian emerging markets at Macquarie Group.
