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Magnus Sees Yuan Sliding to 2008 Low as China Policy Shifts

  • Risk of slump reigniting capital outflows, economist says
  • Policy makers will ultimately continue deleveraging: Magnus
Stocks Boards And Chinese Yuan Banknotes As China Devalues Yuan By Most In Two Decades
Photographer: Tomohiro Ohsumi/Bloomberg
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China’s yuan will head in time to its weakest since 2008, and the country’s stock slump also has further to go, according to the veteran global economist George Magnus.

The currency’s decline will only deepen as monetary policy on the mainland diverges from that of the Federal Reserve, Magnus said in a telephone interview this week. As for what’s going on right now -- the steepest drop for the yuan since the devaluation almost three years ago, and a bear market in stocks -- it reminds him of the 2015-16 selloff, and it’s hard to tell how officials will respond, he said.