The Chinese yuan continued to depreciate during the 20th National Congress of the CCP. On Friday, October 21, the currency slipped to its weakest level since the global financial crisis of 2008.
As Reuters reported, the yuan continued to fall last week though Chinese authorities used their state-owned banks to intervene and prevent the spot price from weakening below the 7.25 per dollar mark.
Despite their attempts to sell dollars on the onshore market to stabilize it, the yuan still finished the last session of the week at 7.2494 per dollar, down 0.46% in one day.
This is the weakest close since January 14, 2008.
In total, the yuan fell about 0.78% last week, a shame for the ruling Chinese Communist Party, which was holding its national congress from October 16 to October 22.
Since the beginning of 2022, the Chinese currency has depreciated 12.3%.
According to U.S.-based news media, the yuan extended its sharp depreciation last week as the signs revealed at the 20th National Congress made domestic and foreign investors more pessimistic about China’s prospects.
During the congress, Chinese leader Xi Jinping reiterated the country’s focus on national security and the continuation of “zero-COVID” policies, which have dampened business sentiment.
Bank officials show no sign of backing down from their hawkish rhetoric on rate hikes, while Chinese policymakers are struggling to support an ailing economy.