China’s yuan falls against dollar, helping exporters

BEIJING – China’s central bank is allowing its tightly controlled yuan to drift lower against the dollar, a move that could help exporters cope with U.S. tariff hikes but raises the risk of reigniting an outflow of capital Beijing spent months trying to stanch.

On Friday, the yuan dipped to a 12-month low of 6.8 to the dollar, down by 7.6 per cent since mid-February.

The slide comes amid a worsening U.S.-Chinese tariff fight, which prompted suggestions Beijing might weaken the yuan to help exporters.

Financial analysts say that while trade tensions add to investor jitters, the decline has been driven mostly by China’s slowing economic growth and the diverging directions of U.S. and Chinese interest rates.