Chinese currency falls to its lowest value in more than five years.
The Chinese Central Bank announced on Monday (30) the devaluation of the yuan (the Chinese currency) to its lowest rate in more than five years against the US dollar, at a time when interest rates are expected to rise in the United States.
The Chinese Central Bank announced today (30) the devaluation of the yuan (the Chinese currency) to its lowest rate in more than five years, in relation to the US dollar, at a time when an increase in interest rates is expected in the United States.
According to the Central Bank's exchange rates, the dollar was worth 6,5784 of the Chinese currency today. This is the lowest exchange rate for the yuan since February 2011.
The Chinese currency cannot be fully converted, and its value against a basket of international currencies can vary by a maximum of 2% per day.
"The yuan will suffer a gradual depreciation," economist Song Yu of Goldman Sachs told Bloomberg news agency.
"The main reason for this devaluation will be a stronger dollar, due to expectations that the FED [Federal Reserve, the US Central Bank] will raise interest rates," he added.
Last week, Federal Reserve Chair Janet Yellen indicated, during a speech at Harvard University, that interest rates will rise soon.
In August, the yuan fell almost 5% in a week, raising fears that Beijing is trying to devalue the currency to gain competitiveness, but authorities have rejected this possibility.