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China Economy: Offshore RMB Fell Nearly 900 Points

China Economy recently reported that, on March 19, Chinese currency RMB fell 865 base points, against the US Dollar, in offshore trading. At the same time, the RMB fell 938 base points onshore. This is the first time since October 2019 that the Chinese RMB fell below 7.16 Yuan for one US Dollar. The U.S. Dollar has seen strong growth recently, with high demand across the globe. It is becoming the core asset for managing risks because of its nature of being fully exchangeable with full global circulation. Experts expressed their belief that the significant decline of the Chinese RMB is typical for a market full of volatility.  At the same time, China is facing high pressure on interest rate reduction. Some investment organizations pointed out that the Chinese currency is looking at further devaluation in the near term and in the foreseeable future. Offshore RMB (CNH) is RMB that circulates outside Mainland China. CNH settlements are typically done in Hong Kong, Singapore, London and Luxembourg.

Source: China Economy, March 19, 2020