25, Aug 2015 (LBO) – Some research institutions in China are working on the assumption of the yuan weakening to 7 to the dollar by year end from the current 6.4135, a report said.
Though these studies done by institutions in China have not yet been made public, they indicate analyst predictions of an eight percent depreciation of the Chinese currency by Dec. 31, a Bloomberg report said.
Before the currency devaluation this month, the yuan was forecast to reach 6.5 to the dollar by the end of the year.
“While the rate used in the research isn’t a government target, it reflects the view that China may allow the yuan to fall further after a depreciation in which the currency was allowed to weaken by nearly three percent on Aug. 11 and 12,” the report said.
A weaker Chinese currency will have an impact on exporters in countries such as Sri Lanka who compete with Chinese suppliers and who would have to adjust their prices accordingly.
The Sri Lankan rupee depreciated to 134.25 from 134.10 on Tuesday.