China’s One Trillion Reasons to Prevent Yuan Tumbling
The Yuan fell 0.1 percent, the most in two weeks, to 6.2471 a dollar on Monday in Shanghai as the foreign-exchange regulator highlighted concerns over capital outflows.
Photographer: Brent Lewin/BloombergThis article is for subscribers only.
China, like much of the world, is beefing up monetary stimulus to boost its economy. Yet, unlike its peers, it probably won’t let its currency depreciate to help.
Sustained weakness in the yuan would make it more expensive to repay the $1.1 trillion of debt the Bank for International Settlements estimates is owed by Chinese companies. As a result, China has to offset interest-rate cuts and other easing measures with steps to curb the yuan’s 3 percent slide from its peak about a year ago.