China will respond to exchange rate fluctuation risks to support exporters: Ministry

China’s Ministry of Commerce said Thursday it will work with the central bank and the entire government to manage exchange rate fluctuations throughout 2024 if the yuan begins to recover against the dollar and make already expensive exchange rates more expensive due to weak Chinese exports.

Manufacturers in the world’s second-largest economy have struggled to find buyers at home and abroad for much of this year. Although exports grew in November for the first time in six months, analysts warned that factory owners were helped by a weak yuan and likely offered unsustainable discounts to find buyers.

“We will work with the People’s Bank of China, the State Administration of Foreign Exchange and other departments… to effectively deal with the risk of exchange rate fluctuations,” said Shu Jueting, a spokeswoman for the Ministry of Commerce.

“We will support businesses through cross-border renminbi hedging and settlement,” he added.

Global investment banks expect the yuan to face continued downward pressure in the first half of 2024 before recovering over the next six months, based on the assumption that the Federal Reserve will begin cutting interest rates in the United States by that time. date.

Source: Terra

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