PBOC Sets USD/CNY Reference Rate at 7.1980 Amid Trade Tensions
PBOC Sets USD/CNY Reference Rate at 7.1980 Amid Trade Tensions
On Monday, April 7, 2025, the People's Bank of China (PBOC) established the USD/CNY central parity rate at 7.1980, slightly weaker than the previous fix of 7.1889.
This adjustment comes ahead of the implementation of reciprocal 34% tariffs between the U.S. and China, scheduled for April 9 and 10, 2025.
The PBOC set the yuan's midpoint exchange rate at 7.198 per dollar, just 0.1% weaker than before the holiday.
This move defied analysts' expectations of a 1.8% drop.
The U.S. is set to increase tariffs on Chinese exports by 34 percentage points starting April 9, 2025, bringing the total rise since President Donald Trump's second term began to 54 percentage points unless a trade agreement is reached.
Chinese authorities aim to maintain currency stability amid trade tensions.
The yuan has only fallen 0.2% year-to-date, despite a 20 percentage point rise in U.S. tariffs since President Trump began his new term.
The yuan's decline may bottom out just above its pre-2005 peg of 8.2765 per dollar, giving Beijing time to evaluate its economic and diplomatic strategies.
