Capital outflows from China worsened in April this year to the largest rate since December 2016. Chinese banks sold $36,7 billion to their customers last month, write Bloomberg.
It said this highlighted unfavorable conditions for the yuan amid a weak domestic economy and uncertainty over the US Federal Reserve's interest rate. In April, Chinese companies bought the largest amount of foreign currency from banks since 2016, as exporters held back dollar conversions and residents bought foreign currency for overseas travel. These factors point to a cautious view of the renminbi, as China's relatively low interest rate relative to the U.S. helps the dollar strengthen. And while the People's Bank of China has stepped in to keep the yuan within a narrow range, uncertainty over the timing and extent of the Fed's rate cuts this year makes it difficult.
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