China’s currency devaluation expected to boost its exports
On August 11, the People’s Bank of China (PBOC) announced a devaluation of the Chinese currency by 1.9 percent to RMB 6.2298 against the US dollar, compared to the official rate of RMB 6.1162 on August 10, in a move which has taken the international currency markets by surprise.
In addition, on August 11 the Chinese currency was devalued to RMB 6.7633 against the euro, RMB 9.5723 against the British pound, RMB 4.5545 against the Australian dollar, and RMB 4.7922 against the Canadian dollar, respectively compared to RMB 6.7226, RMB 9.5071, RMB 4.5413 and RMB 4.6507 on August 10.
On August 8, the Chinese customs authorities had announced that China’s exports in July this year amounted to $195.097 billion, decreasing by 8.3 percent year on year. It is expected that a weaker Chinese currency will make the country’s exports more competitive.