Just one day after the conclusion of the Chinese Communist Party Congress, which gave President Xi Jinping leadership for the third time, the offshore exchange rate of the Chinese renminbi against the US dollar fell to an all-time low of 7.33:1. Xi’s unprecedented third term in office and concerns over the restructuring of his top team are said to have sparked a stock sale that wiped billions of dollars from the wealth of China’s ultra-rich. .
Chinese yuan depreciates 7% since late August
The Chinese currency’s offshore exchange rate against the US dollar hit a new all-time low of CN¥7.33:$1 when it fell 1.5% about 24 hours after the meeting of the Chinese Communist Party (CCP) ended.According to one reportThe currency plunged as the CCP Congress, which backed President Xi Jinping’s bid to lead China for an unprecedented third term, failed to ease investor concerns over the well-being of the world’s second-largest economy. .
The offshore sector’s decline fell to its lowest level in more than a decade as the People’s Bank of China (PBOC) reportedly ended its long-term yuan-fixing policy. In addition, the renminbi fell against the US dollar in the onshore market, dropping 0.6% to 7.2648 CN on Oct. 24. After late August 2022, the exchange rate will were around At 6.86 CN yen per dollar, the yuan is now down almost 7% against the dollar.
Like other global currencies depreciating against the US dollar in 2022, the renminbi depreciated whenever the US Federal Reserve raised interest rates. Rate hikes are aimed at containing rising inflation in the US, but the dollar seems to be getting stronger with each round. As a result, many currencies including the pound, euro, yen and Swiss franc hit record lows against the dollar.
Analysts expect another rate hike by the Fed in November, so the renminbi is expected to weaken further against the dollar. This sentiment is backed up by a recent Bloomberg survey, in which half of his 30 yuan traders interviewed said he believes the yuan will eventually fall to 7.5 CN yen per dollar. It became clear that
Stock market crash erodes wealth of China’s rich
while another report President Xi Jinping’s growing influence over the government, confirmed in the recently concluded parliament, he said helped spark a stock sale that saw China’s ultra-rich lose about $9 billion. Regarding billionaire losses, Kenny Wen, Head of Investment Strategy at KGI Asia, said:
Today’s downturn reflects fragile investor sentiment. People are trying to stick to the Chinese and seek more influence after the remodel.
Even before the Oct. 24 plunge, President Xi Jinping’s “zero Covid” policy had already ensured 2022 would be the worst year for China’s wealthiest individuals, according to the report. rice field.
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