Some Chinese agencies' research now assuming RMB will reach 7 against US dollar

Some Chinese agencies have begun to assume the yuan will weaken further to 7 against against the US dollar by the year’s end in their research, Bloomberg reported, citing unnamed sources. The research also assumes the yuan will fall further to 8 against the dollar by the end of 2016. The projected rates are not government targets, but suggest the the central bank may allow the yuan to fall further after dropping almost 3% on August 11 and 12.  “A certain level of depreciation can be accepted according to China’s international payments situation, but it may bring unforeseeable pressure on foreign debt repayments and capital outflows,” said Commerzbank AG economist Zhou Hao.