Chinese currency may decline further-fence post, fence, wire mesh
China's monetary policy and the renminbi's value face major uncertainties in the capital marketafter the US Federal Reserve's first interest rate rise in 10 years, according to economists.
This is especially the case as few indicators point to a reversal in the country's economicslowdown, they said.
The Fed decision, announced by chairwoman Janet Yellen on Wednesday, saw it raise rates to25-50 basis points from 0-25.
Emerging economies, especially China, will be most affected by the rate rise, according toresearch by Goldman Sachs.
The renminbi may fall further against the US dollar, devaluing renminbi-denominated assets andtriggering increased capital outflows, economists said.
The yuan fell against the dollar for the ninth consecutive day on Thursday, with the daily referenceexchange rate being adjusted to 6.4757 per dollar from 6.4626 a day earlier.
The renminbi has dropped by 1.4 percent against the dollar in two weeks.
According to the State Administration of Foreign Exchange, China's top foreign exchangeregulator, Chinese banks bought foreign exchange worth $116.7 billion last month and sold$171.5 billion, expanding the deficit to $54.8 billion from $20.1 billion in October, indicatingaccelerated capital outflows.
