PBOC Sets USD/CNY Reference Rate at 7.2038 Amid Trade Tensions
PBOC Sets USD/CNY Reference Rate at 7.2038 Amid Trade Tensions
On April 8, 2025, the People's Bank of China (PBOC) set the USD/CNY central parity rate at 7.2038 per dollar.
This represents a slight depreciation from the previous day's fixing of 7.1980.
The rate is firmer than Reuters' estimate of 7.3321.
Following the fixing, the onshore yuan weakened to 7.34 per dollar, the lowest since September 2023.
The offshore yuan traded at 7.3501, reflecting similar depreciation.
The adjustment comes amid escalating trade tensions between the U.S. and China, with recent U.S. tariffs impacting Chinese exports.
A weaker yuan can make Chinese exports more competitive, potentially mitigating some adverse effects of tariffs.
Analysts interpret the PBOC's actions as a controlled approach to currency depreciation, aiming to balance export support with financial stability.
The PBOC is cautious of allowing excessive depreciation to prevent capital outflows and maintain market stability
