Beijing [China], July 25 (HornbillTV/ANI): The Chinese currency renminbi, or the yuan, weakened 21 pips to 6.7543 against the US dollar on Monday, according to the China Foreign Exchange Trade System.

The global political turmoil has affected emerging economies across the world, but it is unlikely that the hegemony of the US dollar will be challenged anytime soon as the Chinese yuan has failed to supersede the US currency.

In China’s spot foreign exchange market, the yuan is allowed to rise or fall by 2 per cent from the central parity rate each trading day.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day, reported Xinhua.

Reports say that China’s foreign exchange market saw a turnover of 15.95 trillion yuan (about 2.38 trillion U.S. dollars) in May, down from 17.14 trillion yuan in April.

Amid uncertainty over the zero-COVID policy, foreign issuers have hit the brakes on offerings of China’s panda bonds for investing in Asia’s largest economy.

A Chinese renminbi-denominated bond sold in China but issued by a non-Chinese is known as a panda bond.

As per Nikkei Asia, the issuances of so-called panda bonds for January to June are down half from a year earlier to a six-year low of 7.9 billion yuan (USD 1.18 billion), data from Refinitiv shows.

Only two companies have issued panda bonds in the first half: finance subsidiaries of BMW and Mercedes-Benz Group, down from five issuers a year earlier.

Panda bond issuances hit a full-year record of 32.4 billion yuan in 2021, but this year’s coronavirus resurgence has given issuers pause, reported Nikkei Asia.

While Shanghai and other cities have emerged from the coronavirus lockdowns that disrupted daily life and business activity for two months, the government’s hard-line zero-COVID containment policy hangs like a cloud over the economic outlook.

“There is no knowing when lockdowns may occur going forward,” said Shinichi Seki, a senior economist at the Japan Research Institute.

Small banks in China are running into trouble as they are accused of crimes, bad loans and excessive risk, due to the failure of Xi Jinping’s zero Covid policy.

Peter, a depositor, who had put his life savings of about USD 6 million into accounts at three small banks in China’s Henan province, said that he hasn’t been able to access them since April, CNN reported.

“I’m close to having a nervous breakdown. I can’t sleep,” CNN Business quoting Peter reported.

Apart from Peter, thousands of depositors have been fighting to recover their savings from at least six banks in rural provinces in central China.

Last year, China Bohai Bank, a national joint-stock commercial bank, has been accused of secretly using a client’s USD 438 million in deposits as collateral.

Monetary tightening in the U.S. and other advanced economies, along with rising fuel and commodity prices due to the Russia-Ukraine conflict have jacked up inflation rates.

Meanwhile, China has been promoting its yuan, but it is extremely unlikely that it will overtake the US dollar due to the international community’s distrust of its ambitions and the opaque governance of its economy and currency.