The depreciation of the Chinese renminbi (RMB) in the last few days is likely to benefit the Chinese clothing sector, according to experts.
In mid-February 2014, the exchange rate was US$ 1 = 6.06 yuan, which has depreciated to 6.15 yuan by first week of March 2014.
According to experts, the decline in RMB value is a normal fluctuation, and hence the depreciation is likely to be of short-term nature. But, from a market perspective, this depreciation in RMB value will benefit some export sectors, especially the textiles and clothing sector.
The companies exporting garments to the US will especially gain from settlement of foreign exchange or sales growth, according to market analysts.
In recent years, the RMB appreciation trend has dug into long-term profit perspective of enterprises, and even swallowed a large chunk of profits of some companies, while some companies ended up in negative profit.
The devaluation of the currency will directly stimulate the growth performance of the apparel and textile industry in China, according to experts.