Economists at Commerzbank forecast CNY to appreciate mildly this year. However, risks to growth and CNY remain significant.

Yuan still has room to gain

“Due to the Covid reopening and in anticipation of a weaker Dollar later this year, we forecast CNY will continue to appreciate this year. But the pace of appreciation will be mild as we remain cautious about the speed of the economic recovery, especially in H2.”

“However, risks to growth and CNY remain large. The strength of consumption recovery will hinge on a corresponding improvement in jobs and income prospects. The property slump will take time to turn around, while headwinds from global slowdown and US-China tensions will remain.”

Source: Commerzbank Research