Offshore renminbi drops to record low

Posted on October 24, 2016

The pressure’s piling on China’s currency.

The country’s offshore renminbi fell to a record low against the US dollar on Monday after policymakers in Beijing allowed the onshore rate to decline and a spate of data dampened the outlook for the world’s biggest emerging market economy.

The so-called CNH rate – which is traded outside of mainland China (mainly in Hong Kong) – slipped to a low of 6.788, surpassing the previous record of 6.7850 set more than six years ago.

Unlike the onshore CNY rate, the CNH is not subject to a trading band. Pressure on the currency has been building since October, when the International Monetary Fund decided to include the renminbi in its special drawing rights basket. Some strategists suspect that the central bank has become more comfortable with letting the currency weaken following the SDR inclusion.

You must be logged in to post a comment Login