Reuters - Video

Edition: US | UK | IN | CN | JP

video Video

China's currency plunges in 2016

Friday, December 30, 2016 - 01:42

Beijing officials face a long list of worries as China's yuan posts its biggest annual fall in more than two decades, and Donald Trump's threats to impose tariffs on Chinese imports could add further pressure in 2017. Tara Joseph reports.

▲ Hide Transcript

View Transcript

An annus horriblus for China's yuan . The currency falling nearly 7 percent against the dollar in 2016, its biggest annual fall since records began more than 20 years ago. Signs that all is not well in the world's number two economy as it gears up a new wave of challenges in the year ahead. The spiraling yuan has forced China's Central Bank to dip into its currency reserves, spending more than 1 trillion dollars this year just to prop up the currency. But an even bigger problem for Beijing is stemming a stampede of investors trying to get their money out of the country. A note from Goldman Sachs says an estimated 50-billion dollars a month has drained out of China since June, even with officials putting up walls to try and prevent money rushing out. And amid all this - in rides Donald Trump. The U.S. President elect threatening to impose stiff tariffs on Chinese goods, piling even more pressure on the currency. China's central bank is denying reports report that the yuan fell below the psychologically crucial level of 7 to the U.S. dollar this week, a sign of how sensitive the topic is as the year ends on a sour note. And pressure to come up with a defensive game plan will only mean more stress for on authorities in the year ahead. As Trump takes office, China will be preparing for its 19th party congress with president Xi Jinping looking to shore up his power for a second 5 year term. Stability at all costs will be the watch word. But whether the co-called "people's currency" reflects that, could be a whole other story. ENDS

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

China's currency plunges in 2016

Friday, December 30, 2016 - 01:42