Weaker yuan seen in 2015
The yuan may depreciate about 2 percent against the dollar this year amid China’s economic slowdown, said a report released on Wednesday in Shanghai.
“With robust economic growth, strong expectations of rising interest rates and lagging economic recoveries in many other countries, the US dollar will further strengthen and appreciate against the yuan,” said an annual exchangerate report by Chen Xuebin and Li Huajian, researchers at the Institute for Financial Studies at Fudan University.
The report said the yuan’s value against the dollarmay fluctuate by4 to 5 percent in 2015 amid uncertainty over global economic conditions.
The eurozone countries have been recovering slowly, which may not fundamentally change the sluggish trend of the euro in 2015. the report said.
As the yuan might be included in the InternationalMonetary Fund’s Special Drawing Rights reserve asset (effectively a basket of reserve currencies), internationalization of the currencymay take a big leap in 2015, said market insiders.
“As the renminbi has great prospects of being included in the SDR, mounting numbers of investors have been keen to invest in the currency, which will also help accelerate China’s financial market reform,” said Nathan Chow, an economist at DBS Bank Ltd.
He said more policies are expected to address the demand for interest rate liberalization, a revised exchange-rate mechanism and renminbi capital account liberalization in the near future.
“This yearmay see great changes in the renminbi’s role in the global economy and China aims to make the yuan a significant currency in global transactions,” said Chow.