As the Chinese currency continues to perform strongly against the dollar, large corporates trading into and out of China are reportedly looking to ramp up their use of yuan-denominated trade finance products. Yet concerns remain over the potential impact a burgeoning Chinese currency could have on smaller domestic exporters. The renminbi (Rmb) has risen markedly since the early months of last year. At that time, the Chinese currency fell to its weakest point against the greenback since 2008 as concerns over the spread of Covid-19 led to lockdown restrictions in provinces across the country. The currency plunged to 7.16 against the US dollar in May, and stood at 6.86 in January last year. The latest recorded data from the Bank of England shows that the spot exchange rate was registered at 6.46 through Tuesday this week. Rajiv Biswas, Asia Pacific chief economist at IHS Markit, points to the depreciating US dollar, China’s strong economic performance in the face of Covid-19 last year, and export growth in the second half of 2020, as reasons for the Rmb gaining ground. The Chinese economy rebounded quickly after a historic contraction in Q1 2020, which saw it pummeled by Covid-19 containment measures and the… continue reading
Continue reading Renminbi’s rise: Chinese SME exporters face uncertainty as larger corporates eye lucrative trade finance opportunities. This article appeared first on CTRM Center.
Source: CTRM Center