The currency comes in an onshore variant, which is legal tender in China, and an offshore entity, which is traded abroad. Both are currently under a lot of pressure.
(Photo: Reuters)
Dusseldorf The different strategies of the US and Chinese central banks are reflected in the exchange rates in Asia: the Chinese renminbi yuan has fallen to its lowest level since the 2008 financial crisis.
Early Wednesday morning, the so-called onshore yuan was trading at 7.2235 yuan per dollar. It is the legal currency used in Mainland China. The offshore yuan, which is traded abroad, plunged to its lowest level since data collection began in 2010.
While the US Federal Reserve is fighting the current inflation with consistent interest rate hikes, China’s People’s Bank of China (PBoC) has not reacted to the risks of a recession to date. She fears a further weakening of the local economy, which has already been hit by the escalating real estate crisis and strict corona restrictions. As a result, the dollar continues to strengthen while the yuan plummets.
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