CHINA-MARKETS/YUAN-EXPORTS China says yuan depreciation will stimulate exports

Record ID: 144343

  • Title: CHINA-MARKETS/YUAN-EXPORTS China says yuan depreciation will stimulate exports
  • Date: 12th August 2015
  • Summary: TIANJIN, CHINA (FILE - MAY 16, 2015) (REUTERS) PORT AT TIANJIN VARIOUS OF CONTAINERS BEING TAKEN OFF SHIPS CONTAINERS BEING LOADED ONTO SHIP VARIOUS OF CONTAINER BEING LOADED ON TO TRUCK DRIVER LOOKING IN WING MIRROR CRANE LIFTING OFF CONTAINER TRUCK DRIVING OFF
  • Embargoed: 27th August 2015 13:00
  • Keywords:
  • Location: China
  • Country: China
  • Topics: General
  • Reuters ID: LVA8D1072Z9QUAISE469TWION194
  • Aspect Ratio: 16:9
  • Story Text: China's Ministry of Commerce acknowledged on Wednesday (August 12) that a depreciation in the yuan would have a stimulative effect on exports, a day after the central bank startled markets by devaluing its currency by nearly 2 percent.
    Tuesday's (August 11) devaluation followed a run of poor economic data and raised market suspicions that China was embarking on a longer-term slide in the exchange rate. It was the biggest one-day fall in the yuan since a massive devaluation in 1994.
    Deputy Director Of China Investment Promotion Agency of the Commerce Ministry, Zhang Yuzhong, said he believed the devaluation would help shore up the country's weakening exports after data showed an 8.3 percent drop in exports in July.
    "I think the present situation won't have a clear impact on the areas of trade and investment. My personal feeling is that, as in the past, the Renminbi - and the newest information today that the Renminbi has gone down - the adjustment of the Renminbi, especially downward adjustments will have a stimulating effect on exports," he said.
    A cheaper yuan will help Chinese exports by making them less expensive on overseas markets.
    China's yuan hit a four-year low on Wednesday, falling for a second day after authorities devalued it in a move that sparked fears of a global currency war and accusations that Beijing was giving an unfair advantage to its struggling exporters.
    Spot yuan fell to 6.43 per dollar, its weakest since August 2011, after the central bank set its daily midpoint reference at 6.3306, even weaker than Tuesday's devaluation. The currency fared worse in offshore trade, touching 6.57.
    The central bank, which had described the devaluation as a one-off step to make the yuan more responsive to market forces, sought to reassure financial markets on Wednesday that it was not embarking on a steady depreciation.
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