PBoC's Actions Spark Debate and Confidence Concerns over Yuan's Weakness
The People's Bank of China (PBoC) has allowed a 2% drop in the Chinese currency, triggering a debate over the role of renminbi internationalization. Some Chinese commentators blame countries like Brazil, Argentina, and Russia for accepting renminbi payments but selling off the currency for Western ones. However, financial commentators and economists argue that the depreciation of the yuan is due to various factors, including the United States' rate hikes and China's weaker-than-expected economic recovery. China's total exports fell 8% in May, and foreign direct investment (FDI) also declined. Experts predict that the renminbi will continue to fluctuate but is unlikely to experience a sharp decline.