Curb On De-Dollarization As Chinese Investors Expect Yuan Dip
Chinese investors are anticipating the yuan to dip as tensions around US tariffs continue. There has been a rise in foreign exchange deposits at banks and currency swaps, move which hints at investors anticipating a dip in the yuan’s value. The development could lead to curbs on the de-dollarization movement. Yuan Gains Against The US Dollar Source: Reuters / Jason Lee / Illustration Chinese investors expect the yuan to hold steady against the US dollar for now before facing a dip. Even more, People’s Bank of China (PBOC) is in a dilemma. A sudden movement of the yuan could lead to businesses and households selling billions of dollars. The move could be motivated by opportunities “ to catch better yuan levels or to stave off losses .” Such a development could stress China’s de-dollarization motives. The country has spearheaded the move away from the greenback over the last decade. The yuan has gained 1.5% against the US dollar since April 2 of this year. Th...