Major investment banks and research firms project offshore yuan to weaken to an average 7.51 per dollar through the end of 2025, according to CNBC's calculation of forecasts from 13 institutions.Chinese authorities are facing a tough call of protecting the yuan from falling too much while also striving to get the economy back on track.
The yuan would need to move to a level of 8.42 against the dollar to fully factor in 60% tariffs on all Chinese goods, according to the projection of Mitul Kotecha, Barclays' head of FX & EM macro strategy of Asia.During the initial round of U.S.
"Any perceived lack of consistency in the new US administration's policy statements would also add to the uncertainty," Wang added, who expects the PBOC to take"counter-cyclical measures to prevent its currency from overshooting the topside."Chinese authorities are facing a tough call of protecting the yuan from falling too much while striving to get the economy back on track.
But the challenge is that the central bank may not want to raise interest rates to contain yuan's decline, as that would weigh on growth of an already faltering economy, Chehab added.