The Chinese yuan has weakened to its lowest levels in more than a year.
It has triggered fears that a sharp devaluation could roil markets like in 2015.
But China’s economy and global conditions are different than back then.
The Chinese yuan has been weakening–triggering fears of a sharp devaluation that could roil global markets. Should markets be worried? We see scope for the yuan to moderately depreciate through the rest of the year in response to slower growth, financial deleveraging and escalating trade tensions. The Chinese authorities are likely to rely on monetary and fiscal policy tools, rather than the currency, to manage any growth slowdown in the second half, in our view.
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