Why yuan undervalued

Brand Solutions. Video series featuring innovators. ET Financial Inclusion Summit. Malaria Mukt Bharat. Wealth Wise Series How they can help in wealth creation. Honouring Exemplary Boards. Deep Dive Into Cryptocurrency. ET Markets Conclave — Cryptocurrency. Reshape Tomorrow Tomorrow is different. Let's reshape it today. Corning Gorilla Glass TougherTogether. ET India Inc. ET Engage. ET Secure IT. In May, Morgan Stanley analysts adjusted their forecast weaker to 6.

The investment bank did not have updated analysis to share as of late Tuesday. Skip Navigation. Key Points. The Chinese yuan has strengthened to three-year highs against the U. The People's Bank of China made a rare announcement Monday that financial institutions will need to increase the ratio of their foreign exchange deposits. On Wednesday, the central bank set the yuan's midpoint fix weaker against the U.

In this article. VIDEO Personal Finance. Your Practice. Popular Courses. Markets News Trading News. News Markets News. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.

Related Articles. Oil How Petrodollars Affect the U. Partner Links. A debtor nation has negative net investment after recording all of the financial transactions it has completed worldwide. Manipulation Definition Manipulation is the artificial inflating or deflating of the price of a security or otherwise influencing the market's behavior for personal gain.

Read about petrodollar recycling and the history of the petrodollar. What Is Currency Depreciation? Currency depreciation is when a currency falls in value compared to other currencies. Easy monetary policy and inflation can cause currency depreciation. Adjustable Peg Definition An adjustable peg is an exchange rate policy where a currency is pegged or fixed to a currency, such as the U. Pegging Definition Pegging is controlling a country's currency rate by tying it to another country's currency or steering an asset's price prior to option expiration.

Investopedia is part of the Dotdash publishing family. How does China devalue its currency? What is the impact of a weaker yuan? Have they done this before? Image source, AFP. Last month, data showed China's economy grew at its slowest pace since the early s during the second quarter. Why has it angered the US? Why is currency manipulation so controversial?

What's next for the yuan? Analysts forecast the yuan will weaken further. Related Topics.