Offshore yuan strengthens amid anticipated Chinese fiscal stimulus

The offshore yuan is appreciated at approximately 7.11 per dollar, supported by expectations of further fiscal stimulus measures from China.

Offshore yuan strengthens amid anticipated Chinese fiscal stimulus

Although the National People's Congress Standing Committee has not yet announced a meeting date, traders are eager for details about the anticipated stimulus package, estimated to be around CNY 8 trillion. They also foresee CNY 1 trillion in special government bonds aimed at bank recapitalization and a CNY 5 trillion increase in the local debt swap bond quota. The yuan's rise is further reinforced by interventions from central state-owned banks, actively selling dollars in the spot market to strengthen the currency.

PBOC cuts interest rates to record lows; traders await MLF decision

Earlier this week, the People's Bank of China implemented monetary easing measures, cutting interest rates to new record lows. 25 basis points reduced the one-year loan prime rate to 3.1%, while 25 also cut the five-year loan prime rate to 3.6%. Traders are preparing for the PBOC's upcoming 1-Year MLF decision, due tomorrow.