Recently, the yuan dropped sharply. Chinese authorities, instead of taking responsibility, have blamed the United States for the weakening currency.
According to Apollo News, the offshore yuan fell to 7.13 to the dollar on September 30.
It even slid to 7.25 per dollar on September 28, the weakest level since 2008.
Data from Reuters showed that the yuan has lost more than 11% to the dollar so far this year. The Chinese yuan is looking to set its biggest annual loss since 1994.
The depreciation of the yuan came as China is facing numerous issues, both economically and diplomatically.
According to an analysis from Chinese economist He Jiangbing, the yuan is depreciating because the world’s second largest economy is declining.
In fact, some major financial institutions such as Barclays have predicted that China’s economy would grow below 3% this year.
He added that the central banks of China and the United States are deviating from regular strategies.
China is following an accommodative monetary policy to support its troubled economy, while the U.S. Federal Reserve is tightening its policy to fight inflation.
He also pointed out some other reasons that the diplomatic relations between the Chinese regime and major powers have deteriorated—foreign capital has been withdrawn from China, and the yuan has been overvalued for a long time.
The economist predicted that yuan depreciation would be a trend for a long time.
With the yuan weakening, the regime’s state news agency Xinhua issued a comment on September 29. It accused the U.S. of turning economic issues into political issues and using its dollar dominance to spread the crisis to other countries.
Xinhua, a mouthpiece of the Chinese Communist Party, said that the aggressive rate hike by the Fed was a strategy chosen by the U.S. after thorough calculations.
In fact, the U.S. economy remains strong and the dollar has been appreciating against other major currencies.
As a practice, China’s state media has frequently sought to shift public opinion away from the internal issues.
In an effort to underpin the yuan, China’s central bank has asked its state-owned banks to prepare to sell dollars in offshore markets.
Reuters reported that China’s major state-owned banks were told to ask their offshore branches in Hong Kong, New York, and London, to review their holdings of the offshore yuan and to be ready to take action.
The purchase of the yuan and selling of the dollar could underpin the Chinese currency.