Capital outflows push down renminbi despite trade surplus growth

The yuan has fallen 0.7% to roughly RMB6.25 per US dollar in 2015 following a drop of 2.4% last year in spite of a growing trade surplus, The Financial Times reported. After almost ten years of reliable appreciation, the yuan has come under pressure as expectations of rising US interest rates combined with quantitative easing by the European and Japanese central banks has propelled capital outflows from emerging markets and into dollar assets. Some analysts believe the fall was planned by the central bank to defend export competitiveness, but the drop in China’s exchange reserves late last year suggests it may have intervened to prop up the currency.