Fruit exporters who focus on the Chinese market could see their returns adversely affected by the country’s recent decision to devalue the renminbi (RMB) 1.9% against the U.S. dollar, while imports of Chinese produce items will likely become cheaper.
The People’s Bank of China (POBC) said the decision made Tuesday was a “one-off depreciation”, taking the midpoint for trading up to 6.2298 to the dollar, compared to 6.1162 on Monday.
“Emerging market and commodities currencies are facing downward pressure, and we are seeing increasing volatilities in international capital flow. This complex situation is posing new challenges,” a spokesperson for the bank said in a release.
“As China is maintaining a relatively large trade surplus, RMB’s real effective exchange rate is relatively strong, which is not entirely consistent with market expectation.
“Therefore, it is a good time to improve quotation of the RMB central parity to make it more consistent with the needs of market development.”