As the yuan surpassed 7.2 yuan per dollar and hit its lowest level in 14 years, the Asian stock market is plunging. In particular, Korea’s KOSPI plunged more than 3% and is showing the biggest drop.
As of 2:30 a.m. on the 28th, Asian stocks includng Korea’s KOSPI fell 3.09%, Japan’s Nikkei fell 2.26%, and Australia’s ASX index fell 0.83% respectively.
China’s Shanghai index is falling 1.37% and Hong Kong’s Hang Seng index is falling 2.78%, respectively.
In fact, Korea’s KOSPI is falling further than the Chinese stock market.
The reason why the sub-stock market is falling all at once is that China’s yuan has surpassed 7.2 yuan per dollar.
On this day, the yuan/dollar exchange rate rose 0.73% from the previous trading day to 7.2282 yuan (the rise in the exchange rate falls in value). It is the first time in 14 years that the regional exchange rate has surpassed 7.2 since 2008.
The offshore exchange rate also rose 0.75% to 7.2312 yuan. This is the highest ever since the start of the transactions in 2010.
Experts say that the regional and forex rates have surpassed 7.2 yuan because the People’s Bank of China is struggling to prevent the dollar from strengthening, but the dollar is so strong that China is helpless.
The Asian stock market seems to be shocked as even the yuan, which had been better than other Asian currencies, hit its lowest level in 14 years.
As the yuan plunges, other Asian currencies are also plunging. The Korean won has surpassed 1,440 won per dollar, the lowest level in 13 years.
India’s rupee also fell to a record low of 81.94 rupees per dollar.
On the 28th, the rupee/dollar exchange rate in India recorded 81.94. This is an all-time high, up about 1% from the previous trading day (the exchange rate rise is depreciated).
As a result, the value of the rupee has fallen about 10% against the dollar this year.
India recorded 13.5% of GDP growth in the second quarter, overwhelming other countries. China accounted for only 0.4 percent. The U.S. also recorded negative growth rate of minus 0.6% (provisional) in the second quarter, which is the second consecutive quarter.
India’s economy is growing overwhelmingly compared to other countries, but it is helpless against the strong global dollar.