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Jakarta Post

How yuan’s depreciation affects the world, Indonesia

  • Fadhil Hasan and Achmad Nur Hidayat

Jakarta   /   Mon, August 19 2019   /  12:40 am

The world’s monetary markets are undergoing turmoil, and the United States-China trade war is escalating. The situation was triggered by the latest People’s Bank of China (PBOC) policy, which depreciated the yuan on Aug. 5. The currency had plunged to its lowest point. According to The Wall Street Journal, one US dollar amounted to over 7.10 yuan.The move was reportedly made in response to US President Donald Trump’s threat that Washington would impose a 10 percent import tariff on Chinese products, amounting to US$300 billion, starting on Sept. 1.The public reacted to the yuan’s depreciation by selling off global shares. In an offshore market, $1 was traded at 7.0949 yuan, and after changing hands in an onshore market, $1 was traded at 7.0507 yuan. In an onshore market, the yuan was allowed to move in a band that was able to fluctuate 2 percent from the reference rate.There was ...