Wednesday, January 19, 2022
Martin Hennecke

Yuan soars to three-year high on growth bets
<p>China&#39;s yuan advanced to the strongest level since May 2018 amid bets that monetary stimulus will sustain the nation&#39;s growth and the new Covid variant will have a limited impact on the global recovery.</p><p>The onshore yuan gained as much as 0.3 percent to 6.3451 per dollar, breaching a year-to-date high reached in May.</p><p>The move came as optimism that Omicron will prove a manageable risk for the global economy damped demand for the US dollar as a haven. Traders also became more confident over China&#39;s growth after the central bank announced broad monetary easing this week.</p><p>The yuan has gained 2.8 percent this year, making it the best performer in Asia, thanks to inflows driven by robust exports and foreign purchases of higher-yielding onshore bonds.</p><p>Confidence was further boosted this week when the Communist Party&#39;s politburo meeting concluded with a signal of more easing and a pledge to stabilize the economy in 2022. A lack of aggressive measures from the central bank to stall the advance also stoked bets that the appreciation would be sustained.</p><p>In other news, China&#39;s economy is expected to grow by 8 percent this year and 5.2 percent in 2022 with a rising Consumer Price Index and an easing supply chain hurdle despite the new Covid-19 variant threat, Kang Yong, chief economist of KPMG China, said in a latest report.</p>

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