China’s central bank sets the yuan reference rate above market expectations, signaling tolerance for further depreciation amid global dollar strength.
The People’s Bank of China set the USD/CNY reference rate at 6.8209, weaker than the 6.8048 estimate. The move follows a broader dollar rally and suggests Beijing’s measured approach to yuan stability amid capital flow pressures.
Prior to the fix, offshore yuan trading reflected expectations of a softer currency, with markets pricing in modest depreciation. The PBOC’s daily fix serves as a midpoint for yuan trading, with a 2% band allowed on either side.
The yuan’s decline comes as global risk sentiment sours, with the dollar index extending gains. Analysts note the fix may ease pressure on exporters but risks stoking capital outflows if depreciation accelerates.