In relation to the dollar, the yuan dropped to as far as 6.9390, its lowest point since 2020, by 0.6%.
After several COVID breakouts in the region, the administration decided to prolong the Chengdu lockdown. The continuation of mobility restrictions in Shenzhen had dealers fearful of further halts to business activities.
The fresh shutdowns follow figures published the previous week that revealed China’s manufacturing industry contracted in August for the second month in a row.
The services PMI of China registered a reading of 55 last month, higher than the 54 expert estimates, according to a private survey published by Caixin on September 5. However, it decreased from the figure of 55.5 in July.
The result raised many doubts about whether the services sector’s revival is progressing. The vast service sector in China is a key engine of economic expansion and contributed the most to GDP in 2022.
Additionally, according to official PMI figures released this week, China’s non-manufacturing businesses expanded more slowly in the last month.
China is battling to restore its economy after the string of harsh COVID-19 restrictions in 2022. Beijing remains adamant about maintaining its rigorous control of the outbreak of COVID-19.
The People’s Bank of China (PBOC) lowered lending rates in August, which hurt the native currency. Additionally, the government unveiled many stimulus plans to boost expenditure and stimulate the economy.