The yuan is setting a course for depreciation this year as risks to economic growth put an end to two straight years of gains.
The resurgence of COVID-19 lockdowns and surging commodity prices are spurring doubts over China’s 5.5% growth target for the year. And the prospect of further monetary easing as global central banks hike rates is set to accelerate outflows and further undermine the yuan.
Tolerance at the People’s Bank of China (PBOC) for yuan strength also is wearing thin: Through fixings last week it made a push to weaken the currency.