Yuan devaluation: China’s decision to devalue the yuan has sent oil prices down and put even more pressure on the beleaguered rouble – although Russian analysts are predicting that a weakened Chinese currency will help stabilise its neighbour’s economy in the longer term and and cause demand for oil to rise. “The decision by China’s Central Bank will surely increase the pressure on the currencies of all the developing countries,” a source within Russia’s Ministry of Economic Development told RIA Novosti.
“Since China is the world’s largest consumer of fossil fuels, a weaker yuan puts pressure on oil prices, which has an impact on the Russian economy,” Anton Krasko, chief analyst at MFX Capital confirmed. “The Russian currency is in an uncontrollable dive. In contrast, the Chinese authorities have every opportunity to keep their currency stable,” said Krasko.
“Since China is the world’s largest consumer of fossil fuels, a weaker yuan puts pressure on oil prices, which has an impact on the Russian economy,” Anton Krasko, chief analyst at MFX Capital confirmed. “The Russian currency is in an uncontrollable dive. In contrast, the Chinese authorities have every opportunity to keep their currency stable,” said Krasko.
Source: rbth