One year ago on 7 March 2013, US dollar (USD) in relation to Chinese Yuan (CNY) was US$1 = 6.2132 CNY.
|7 Mar 2013||6.2132|
|15 Jan 2014||6.031|
|13 Feb 2014||6.052|
|4 Mar 2014||6.136|
|10 Mar 2014, 3.14 pm||6.141|
Until 13 February 2014, CNY strengthened consistently against US dollar to US$1= 6.052 CNY. An appreciation of 2.6% over the period (of about 11 months). However, the table turned and CNY weakened from then on for three weeks now. Now US$1 = 6.141 CNY. This is a 1.4% declined over three weeks but still 1.1% higher than 7 March 2013’s exchange rate.
In one analyst report, it was suggested that the central bank of China (PBOC) intervened in the market to buy US dollar and sell CNY in order to weaken CNY. One can only speculate the real reasons for this intervention. I can theorise that a weaker CNY is good for increasing Chinese export to the world (especially US) on a weaker CNY. This way, China can grow the Gross Domestic Product (GDP) to meet its target growth rate of 7.5% for this year.
Copyright © 2014, limkimtong for Living Investment
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