China's economic woes mount with the yuan hitting a 16-year low

• The yuan has plummeted against the dollar this year, as China's economy stagnated.
• Now, the struggling currency has dropped to a 16-year low versus the dollar.

The Chinese yuan fell to a 16-year low against the dollar as fresh economic data fueled concern a slowdown in the world's second-largest economy is deepening.

The onshore yuan declined past 7.32 per dollar Thursday to its weakest levels since 2007, even as the People's Bank of China intervened to curb the slump.

It's now fallen almost 6% year-to-date, dragged down by signs that China's post-COVID recovery has failed to materialize.

The latest leg down in the currency came after official data showed China's exports contracted for the fourth month in a row, falling 8.8% in August from a year earlier. That followed a 14.5% drop in the previous month.

China is facing a slew of economic headwinds at the moment that includes a depressed manufacturing sector, rocketing youth unemployment, and an imploding property sector. Economists remain pessimistic on the Asian nation's economic prospects – forecasters polled by Bloomberg have cut their growth expectations for both 2023 and 2024.

The yuan fell in four of the last five months through August, and is extending the weakening streak in September.

Last week China rolled out new measures designed to prop up the struggling currency. The PBOC said that on September 15, it will slash the amount of foreign currency deposits financial institutions are required to hold from 6% to 4%.

This move was aimed at increasing the supply of foreign currencies in local markets, making the yuan more appealing as an investment for Chinese traders.