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Chinese yuan on slippery slope as signs of rate cut emerge

Monetary policy torn between bolstering economy and preventing capital flight

China's yuan has fallen sharply during its sudden economic slowdown caused by zero-COVID lockdowns and U.S. rate hikes.   © Reuters

BEIJING -- Views the yuan will drop further are gaining ground as signs emerge that China's central bank is preparing interest rates cuts to prop up a faltering economy.

The yuan has sharply weakened in recent weeks as China's economy slowed due to its zero-COVID lockdowns and as interest rates start rising in the U.S. The currency slid 5% since mid-April, touching 6.74 yuan per dollar in the Shanghai market on Tuesday, an 18-month low.

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