10/4/2025–|Last update: 10/4/202507:35 PM (Mecca time)
The Chinese yuan decreased today, Thursday, to its lowest level against the dollar since the global financial crisis in late 2007, with the central bank reduced its expectations for the sixth consecutive trading session, in light of the escalation of trade tension between China and the United States.
China imposed heavy customs duties on US imports in response to similar US measures.
Despite the statement of US President Donald Trump to reduce the recently imposed customs duties on dozens of countries, the customs duties on Chinese goods increased to 125%, while China imposed customs duties on American goods by 109%.
Commenting on this, “The United States and China are currently playing a dangerous game to compete for influence … until an agreement is announced or confirmed a large bilateral meeting, it will be.
The Chinese dollar and yuan are now the focus of attention in the foreign exchange market. “
The weak yuan would make Chinese exports cheaper, and reduce the impact of customs duties on the economy.
However, analysts and economists said that the sharp decline may increase the pressure of unwanted capital flows, and threaten financial stability.
Informed sources told Reuters that the Chinese Central Bank will not allow sharp declines in the value of the yuan, and that he instructed major government banks to reduce their purchases from the dollar.
The yuan has declined in local transactions to 7.3518 of the dollar in early trading, which is its lowest level since December 26, 2007.
The yuan lost about 1.2% this month.
In the same context, a prominent colleague at the Brookings Institute in Washington, Robin Brooks, said in a post on the X platform, that the use of the yuan to respond to Trump will be the “strongest weapon” of China, which is “a tremendous impact on global markets,” according to Bloomberg.
Brooks warned that a large reduction in the yuan may launch a global vortex that strikes emerging markets strongly, and if it continues, it may lead to the collapse of the American economy itself.
