More people buying Chinese yuan at money changers in Singapore as currency weakens

SINGAPORE — As the Chinese yuan drops to a six-year low against the Singapore dollar, some money changers here are seeing more people who want to buy the currency.  

A check with some of them on Wednesday (Aug 7) showed that they are also seeing an increase in the number of customers wanting to buy British pounds in the past few days. 

At Aliffan Agency Money Changer in the Arcade at Raffles Place, there has been a 30 to 40 per cent increase in the number of customers looking to buy Chinese yuan since Tuesday.

Mr Deen, 50, who works there and declined to give his full name, said that he does not expect the jump in demand to last. He believes that the weakened currency is temporary and the value of the yuan will not fall any lower. 

Mr Manduja Abdulmajad Packinthum, 48, who works at Today’s Money Exchange in People’s Park Centre, also saw an increase in the number of customers looking to get the Chinese yuan. However, he noted that the amounts exchanged were still modest, likely because people are holding out to see if the yuan will continue to fall. 

When TODAY visited money-changing counters at Chinatown and The Arcade at Raffles Place, the exchange rate on offer was about 5.08 Chinese yuan for S$1. 

REASONS FOR GETTING THE YUAN

Mr Loo Yee Ming, who will be visiting China in two weeks for business, said that he plans to change his currency soon, because he believes that the yuan will quickly bounce back. 

The 50-year-old banker thinks that China cannot let the currency fall any further or it will risk capital flight. 

“When you look at the Chinese yuan, it is already quite low. Those of us who follow the financial markets believe that if China were to let the yuan fall further, it will destabilise the economy and so, China will not allow it to continue to weaken,” he added. 

However, others who spoke to TODAY said that the weakened yuan has not prompted them to do anything different and they will change only what they need. 

Ms Jenny Chew, 65, an accountant, said that while she had read about the weakening yuan in the news, she was changing money because “it’s just for a holiday” in China. 

Similarly, Mr Foo, 66, who regularly does business in China but did not want to reveal his profession or his full name, said that he does not pay attention to the foreign exchange market when he changes his money. 

“The rate always goes up and down, so I change what I need. I don’t need so much (Chinese yuan) so I won’t change more than necessary,” he said.

YUAN TO ‘REMAIN WEAK’ 

Mr Philip Wee, a foreign exchange specialist at DBS bank, said that while the movement of the yuan has been “quite fast and sharp”, analysts are “looking for it to consolidate” in the near future. 

He added that with the ongoing trade war between the United States and China, people are still expecting the yuan to weaken gradually.

Economist Song Seng Wun from CIMB Private Banking said the forecast among analysts is that the yuan will remain weak in the coming months. 

This is because of the global economic slowdown, which has also resulted in the weakening of other currencies, such as the Australian dollar, he added.

However, Mr Song said that focusing on the Chinese currency is misguided: “While markets and the Western media have focused on the Chinese currency falling, they have conveniently forgotten that the US dollar is rising. The focus should be about interest rates being cut everywhere.”