Shanghai (China), May 26 (EFE) .- The Chinese national currency, the yuan, is trading today at its highest value against the dollar since May 2018, with its ‘offshore’ rate – the one negotiated in international markets such as Hong Kong – reaching 6,385 units per dollar around 3:40 p.m. local time (07:40 GMT).
For its part, the official rate that the People’s Bank of China (BPC, central) sets every day stood at 6.4099 yuan per dollar and followed the same upward trend.
Analysts cited by the economic news portal Caixin point to the weakness of the dollar index as the cause of the situation, which caused the Shanghai and Shenzhen Stock Exchanges to register their highest business volumes in almost three months yesterday.
The investment channel that allows trading securities of the Chinese markets through Hong Kong broke its historical record yesterday, with a net inflow of up to 21.72 billion yuan (3.397 billion dollars, 2.774 billion euros) during the day.
The official Chinese press cites experts who point out that foreign investors have seen Chinese stocks as a “buffer” against the “weaknesses” of other currencies, referring precisely to the dollar.
Dong Shaopeng, a researcher at the Peking University of the People, assures that the shares in the US markets are “overbought” and that these are close to a correction phase that would also affect, “inevitably”, the Chinese stock markets.
However, the expert defends that the effect on what are known as ‘A shares’ – those of Chinese companies that are traded in Shanghai or Shenzhen – will not be “serious”.
Despite the positive effect on Chinese stock markets, Chinese analysts believe that the upward trend of the yuan against the dollar will not continue, as an excessively strengthened renminbi (official name of the Chinese currency) would weigh on the competitiveness of Chinese exports, which continue assuming an important engine for the national economy.
Read more
Last week, the vice-governor of the BPC, Liu Guoqiang, wanted to calm the waters and assured that the fluctuations “in both directions” of the yuan have become “normal”, defending the role of market forces in exchange rates .
In his opinion, the yuan exchange rates have been “stable” since the beginning of the year and at a “level of equilibrium and adaptation”.
(c) EFE Agency
