The volatility of the yuan may affect China’s competitiveness with its Asian neighbours over the short term, but it is demographic factors that will be key in the long run as its younger regional peers have attracted more overseas merger and acquisition investment, economists said.
The onshore yuan closed at 6.8997 against the US dollar on Thursday, slightly weakening from the previous close of 6.8887, after the yuan hit a two-year low of 6.9 on Monday.
A hawkish address by US Federal Reserve chairman Jerome Powell last week on its aggressive plans to further raise interest rates to fight inflation has disturbed the global markets, leading to further weakening of the major currencies.
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