China May Devalue Yuan: Economist

New Delhi: As the US reciprocal tariffs hit global markets, Neelkanth Mishra, chief economist at Axis Bank, said on Monday that some countries like China will have no option, but to devalue their currencies in the current scenario.

The global markets have been shaken by tariffs implemented by US President Donald Trump, as countries plan to respond to these strict trade measures. Mishra mentioned China’s mounting balance of payments pressure, driven by capital flight and decreased foreign direct investment.

With China’s trade surplus narrowing and tariffs impacting the economy, he predicted the country might be forced to devalue the yuan.

The risk of a currency war is high, and once devaluation begins, the situation could spiral into an unpredictable environment.