LONDON: China’s onshore yuan, whose trade is regulated by Beijing, sank Thursday to the lowest dollar level since 2007 as sliding Chinese exports revived fear of an economic slowdown.
At about 0925 GMT, the onshore yuan fell 0.13 percent to 7.3279 yuan to the US dollar, moments after hitting 7.3284 yuan – which was the lowest level since December 2007.
The offshore yuan – which is circulated outside mainland China and is more freely traded than currency in the domestic market – fell 0.19 percent to 7,3350 to the dollar.
China’s exports and imports sank again in August, data showed Thursday, adding to growing pressure on authorities to introduce fresh stimulus for the world’s number two economy even as the figures showed some sign of improvement.
“Speculation has increased recently that domestic policymakers could eventually allow the renminbi (yuan) to devalue more significantly to help provide more support for growth from net trade,” said Lee Hardman, currency economist at MUFG bank.
“However, their actions to support the renminbi suggest a gradual depreciation path is favoured as they remain wary of encouraging a sharp pick-up in capital outflows,” he added.
Imports shrank 7.3 percent on-year last month as consumers remained reluctant to purchase while prices fell in July for the first time in more than two years.
And exports – which have historically served as a key growth engine for China – sank 8.8 percent.
But the pace of contraction in both was slower than the previous month.