Chinese yuan plunged to 8-year low

Chinese yuan plunged to 8-year low. November. 18, 2016 07:17. by Eun-A Cho, Gun-Huk Lee achim@donga.com,gun@donga.com.

As U.S. President-elect Donald Trump said that upon taking office, he would declare China as a currency manipulator, the People’s Bank of China announced Thursday a further devaluation of its currency for 10 consecutive days, which was the lowest to the U.S. dollars in eight years and three months. As China keeps maintaining weak yuan even after the Trump administration has mapped out its plan for a trade war against Beijing, the skirmish between the two nations has already broken out before the U.S. president-elect takes office.

The Chinese central bank announced the yuan against the dollar plunged by 6.8692 on Thursday, which was the tenth consecutive day where Beijing has declined its currency value against foreign currencies. Since June 2005 when the central bank decided to introduce yuan exchange rate regime, the Chinese currency dropped for 10 consecutive days twice in 2015 and once in 2008.

On the day, the U.S. dollar hit an eight-year and three-month high against the Chinese yuan, which was even higher than the level in August 2008 when major countries in the world depreciated their own currencies to strengthen their export competitiveness in the midst of global financial crisis.

China has kept weak yuan even after Donald Trump was elected for the next U.S. president who had openly bowed during his presidential campaign that he would declare Beijing as a currency manipulator and plans to introduce a bill for the investigation over it to the Congress on Jan. 20, 2017, the first day of his inauguration. Not a few see that Beijing has in fact declared a war against Washington by maintaining weak yuan despite the repeated warning from the newly-elected U.S. president.

“President-elect Donald Trump’s promised trade tariffs on China would likely hurt U.S. allies Japan and South Korea, which have become increasingly dependent on the Chinese market,” the Wall Street Journal analyzed.