CLSA Sees China's Yuan Plunging 19% by 2017 in Most Bearish Call
- Yuan will end next year at 8 per dollar, brokerage says
- Analyst sees property slide, deposit flight upon devaluation
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China’s yuan will tumble 19 percent by the end of next year as a depletion in foreign-exchange reserves forces policy makers to let investors set the value of the currency, said CLSA Ltd.
As Federal Reserve interest-rate increases buoy the greenback, defending the yuan will cut China’s currency reserves to less than $2.75 trillion by the middle of next year, said Amar Gill, head of Asia research at the brokerage. That will prompt the nation to move to a free-float regime in the second half, he said. CLSA forecasts that the Chinese currency will slump to 8 per dollar by the end of 2017, a weaker level than any of 44 other analyst projections tracked by Bloomberg. The median estimate is for a 3.7 percent decline.