The renminbi exchange rate fell to the lowest level in more than a year

The focus of the Asian financial world is on the Chinese market, after the People’s Bank of China (PBOC) lowered the yuan reference rate to the lowest level since April 2021.

The new reference rate was set by the PBOC at 1 USD for about 6.55 yuan. On the exchange market, the renminbi has also depreciated about 3% against the USD in the past 1 month. In an effort to strengthen support for the local currency, the PBOC has lowered the foreign exchange reserve requirement ratio for domestic banks since the beginning of this week.

Bloomberg news agency recently assessed that China’s economy is decelerating rapidly in April 2022, due to the impact of the most severe outbreak of the COVID-19 pandemic ever in the country and the measures taken to prevent it. restrictive measures to prevent epidemics.

Bloobmberg’s assessment is based on a composite index of eight early warning indicators on the Chinese economy. Accordingly, the composite index has fallen to the threshold of decline and is also the lowest level since April 2020, showing that the current wave of epidemics has seriously affected the world’s second economy.

The March overall index was also revised down from 5 to 4, mainly due to the decline in purchasing managers’ indexes (PMIs) last month. The decline in PMIs across all sectors marked a turning point for the Chinese economy, when the number of new COVID-19 cases increased sharply from 100 cases/day to 8,000 cases/day, prompting authorities to implemented blockade and restriction measures across the country.

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