Amid the Chinese government plans to globalize the yuan, its national currency is rapidly depreciating. Thus, the renminbi was down 0.15% on the Shanghai stock exchange at 6.2458 against the U.S. dollar, hitting the lowest level since late 2012. Interestingly, the yuan exchange rate continued losing its value against the greenback resulting in almost 3% decrease at the moment. The general background of the fall is not significant, but the tight control of the renminbi by the People's Bank of China, these figures indicate that it is time to react. The central bank increased the renminbi’s trading band in a hope to see imminent strengthening of the national currency. However, on the back of the worries, some leading experts say the situation is a part of the central bank’s strategy. U.S. officials have a similar point of view expressing concerns about the sharp decline that might signal rejection of full convertibility of the yuan. Moreover, the temporary weakness of the Chinese currency plays right into the hands of manufacturers who boost their revenues from exports. Perhaps, this is the scenario of Prime Minister Li Keqiang who pledged to step up support for the trade sector. With the important role of exports for China’s economy, the weak yuan is likely to have a positive impact on the overall growth of the country’s economy. However, the positive effect is hardly seen yet and investors are concerned about the decline and that the situation would not improve in the second half of the year. China's gross domestic product increased by only 7.4% in the first quarter compared with the same period a year earlier. For comparison’s sake, Chinese economy was up 7.7% in the fourth quarter of the prior year.
