Caixin
Feb 23, 2022 03:55 PM
OPINION

Fisher: Why U.S. Rate Hikes Won’t Whack the Yuan — or Chinese Stocks

China has amassed huge reserves of dollars through trade, insulating the country against dollar moves. Photo: VCG
China has amassed huge reserves of dollars through trade, insulating the country against dollar moves. Photo: VCG

Will U.S. interest rate hikes sink the yuan, lure foreign capital out of China and slow already-decelerating growth to a crawl — deepening Chinese stocks’ swoon? With the U.S. Federal Reserve talking up tighter policy, that fear is reemerging. But don’t worry. Fed hikes don’t guarantee the yuan will tumble. Even if the yuan does fall, history shows that alone won’t suck capital out of Chinese markets and doom stocks. Let me explain.

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