020 7898 050023 September 2014
CNY (Chinese renminbi) Current Rate:
CNY 10.0491/£1; CNY 6.1498/US$1
As China has been slowly starting to open up its economic doors to the world, businesses have been moving away from converting to and from renminbi via the US dollar, with trading between the euro and renminbi growing in popularity. European companies, in particular, have increasingly opted to trade directly with the renminbi, with daily trading volumes peaking as high as €600m.
Yet China’s seemingly smooth course towards a free-floating renminbi appears to have hit some obstacles. Industrial production grew a mere 6.9% year-on-year in August, compared to 9% in July. A robust growth of 9% in industrial production is key for the economy to grow by 7.5%. The biggest cause for this slowdown comes from the property sector, which accounts for about 15% of the country’s Gross Domestic Product (GDP). This surprising turn of events conflicts with the central bank’s determination not to introduce stimulus into the economy, as the slow growth requires capital to kick-start production back into gear. The economy has also seen a fall in investment, retail sales and housing sales.
While this is worrying, we would stop short of declaring a new era of ongoing misfortune for the Chinese economy. As China moves towards a free floating currency, its economy – and by association, its currency – have had to adjust. It just remains to be seen if China is merely experiencing a hiccup in its journey towards trading freely, or whether there are more serious problems woven within the fabric of China’s economy. For now, we are estimating that the renminbi will strengthen, but stress the need to keep an eye on any developments in the weeks to come.
Rate forecasts for GBP/CNY:
| Time Length | Rate |
| 1 month | 10.2705 |
| 3 months | 10.2538 |
| 6 months | 10.2051 |
Forecasts accurate from 23 September 2014. Data taken from Reuters’ poll.
Data sourced from GBP/CNY and USD/CNY cross.
For help and guidance on making international payments using Chinese renminbi,
call 020 7898 0500 or send us an email
Disclaimer:
The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy or sell. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.
