China Determined to Stabilize the Chinese Yuan

Stabilize the Chinese Yuan

In the past year, the Chinese yuan lost nearly 7% against the U.S. Dollar in the onshore and offshore markets. This was the last report from the year 2016 that was released on December 30th the report came in with a forecast that the Yuan will likely continue to bear downward pressure against the Dollar in 2017. The Chinese economy in general had a troubled year, Chinese indexes were falling and the price of yuan over the USD continued to drop. The Shanghai Composite Index fell to a negative 12.31% and the second-board Index also dropped by 27.71%

With the negative numbers being carried over to this year, the Chinese Economy may remain static in negative positions. China’s growth could slow to 6.5 percent this year from about 6.7 percent in 2016, the government run a meeting which ended on Friday which ended with promises to liberalize investment in state-owned sectors, control real estate speculation and improve the Yuan’s exchange rate.

The Central Economic Work Conference was spearheaded by President Xi Jinping that began on Wednesday. The meeting was focused on setting out economic priorities for 2017 which is a critical year for the Chinese Economy.

After the meeting that was conducted on Wednesday, it was established that devaluation could be their last resort in reviving their dropping economy. in 2015 China’s decision to devaluate the Yuan shocked the global markets because it only pushed the currency by 2 percent.

China’s Fundamentals including economy, monetary policy, trade surplus and the ability to attract foreign investment all point that there is no need for the government to worry too much about its economy.

The Chinese Foreign exchange regulator stated on Saturday that from the start of this year it would level up its analysis on foreign currency purchases and strengthen its securities against illegal money and according to Xinhua China’s yuan will be “basically stable equilibrium level in 2017, while improving the flexibility of the Exchange rate”

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