Confidence in RMB to rebound despite COVID-19: Pakistani experts

By Zafar Hussain | China Economic Net May 9, 2022

BEIJING, May 9 (China Economic Net) - Pakistani experts believe that depreciation burdens on RMB have reduced due to more robust economic growth and rising foreign exchange reserves in China, while the current devaluation is due to the latest pandemic outbreak in different key cities of China.    

Shan Saeed, Chief Economist at Juwai IQI told China Economic Netthat in the last 37 days, RMB has depreciated 4% against USD, and western media continue to feel worried about its outlook. With $3.2 trillion of foreign reserves, macroeconomic stability in China  is coming back.

"I'm confident in Yuan to bounce back despite challenging global economic fragilities. China's economic growth in recent years makes the Yuan an attractive currency for investors. Economic growth has given strength to Yuan, and the People's Bank of China (PBOC) has played an important role in maintaining the structural stability of the Yuan," he mentioned.

He further said that many economies have started moving their trade and commerce in Yuan, which is well positioned to become the currency for the emerging markets.

"At Juwai IQI Global, we expect RMB to maintain stable against USD and to trade between 6.39 and 6.77 in 2022. The GDP growth outlook remains positive and is expected to meander around 4.7% to 5.3% in the current year," Shan stated.

Shan believes that China would continue to make economic progress and lead the world with a solid growth outlook and per capita income, adding that China will become one of the top economies by 2025 and China takes the driving seat.

Sheikh Muhammad Shariq, Vice president of the National Bank of Pakistan and Chief Representative in China told CEN that the current depreciation of the Chinese Yuan is due to COVID-19 that affected the economy, especially after the outbreak in Shanghai, which caused to stop or slow down many trade activities including imports and exports from Pakistan as Shanghai port is one of the busiest ports of the world.  

"China’s economy might face some difficulties due to the latest COVID-19 outbreak and the reducing of economic growth target this year which is 5.5% less than the previous year. But I'm confident that the Chinese economy is expected to maintain its resilience and likely to meet its annual growth target," Shariq stated.

He further said that World Bank and IMF also reduced the world growth target and China is one of the main stakeholders and key growth drivers of the world, and these are the reasons for the temporary depreciation of the Yuan. He said that today China's central bank conducted $1.49 billion of reverse to maintain liquidity in the banking system. 

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