[Asia Economy Reporter Kwon Jae-hee] As China pushes forward with the Hong Kong National Security Law amid escalating US-China tensions, it has further devalued the yuan by raising the yuan's central parity rate against the dollar.
On the 29th, the People's Bank of China announced the yuan's central parity rate against the dollar at 7.1316 yuan, up 0.05% from the previous day. This is the highest level in over 12 years since February 28, 2008, during the global financial crisis.
An increase in the yuan-to-dollar exchange rate means the yuan's value has relatively decreased.
The market interprets the recent sharp decline in the yuan's value as related to worsening US-China relations and China's expanding fiscal deficit policy.
Concerns are growing in the market that the US may retaliate against the yuan's sharp depreciation, potentially leading to another "currency war" following last summer.
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