Market Views: What are the implications of a weakening Chinese yuan?

Last week, China’s onshore and offshore currency weakened past the key level of 7 yuan per US dollar. Although it last happened not long ago in mid-2020, this time the declines are accelerating at a much faster pace since August this year. As the Federal Reserve raised the interest rate again by another 75 basis points on Wednesday (September 21), the Chinese currency further fell to a 27-month low against a surging dollar, with the offshore yuan breaching the 7.1 per US dollar le…