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Trump accused China of playing with the value of the currency as the value of the yuan approached its lowest level in 17 years
As the trade war between the United States and China escalates, the value of the Chinese yuan was close to a 17-year low against the US dollar today (April 9), with President Donald Trump accusing China of playing with the currency's value to compensate for increased tariffs.
The local yuan fell to 7.35 per dollar, the lowest level since December 2007, Nikkei Asia reported. The more freely traded yuan abroad also eased to around 7.375 after reaching 7.42 to the dollar yesterday (Tuesday night).
But the People's Bank of China (PBOC) renminbi daily reference rate, set at 7.2066, was slightly lower than yesterday, but still stronger than analysts had expected. According to this rate, China's central bank has not yet seriously devalued the yuan.
Trump has accused China of playing with the value of its currency to soften the blow from US tariff hikes. The dollar has weakened against other major currencies recently, but analysts note that the People's Bank of China now appears more willing to gradually devalue the yuan.
China's devaluation of the yuan will make Chinese goods cheaper in the international market, and American consumers will be able to buy them at lower prices, which will boost sales.
As the yuan depreciates, the price of American goods in China will rise and sales will fall. As sales of Chinese goods increase and sales of American goods fall, the United States will experience a trade imbalance.
At that time, the more severe restrictions on the US side, Tax increases will be carried out again and a currency war will occur and the world economy will be affected, according to experts.