The offshore yuan steadied around 7.25 per dollar as traders awaited next week’s decision on China’s one-year Medium-Term Lending Facility rate.
Offshore yuan stabilizes ahead of PBoC decision
Earlier in the week, the People’s Bank of China held its one-year loan prime rate at 3.1% and its five-year rate at 3.6%, both at record lows following cuts in October and July. These moves reflect the PBoC’s measured approach to evaluating the impact of earlier stimulus efforts, as China aims to address its economic slowdown and meet its 2024 growth target of around 5% amid ongoing challenges.
Committed to maintain currency stability
Additionally, the central bank reiterated its commitment to maintaining currency stability, as the yuan faces pressure from the U.S. dollar's strength, which has been amplified by Donald Trump’s recent election victory. Market concerns over potential higher tariffs on Chinese goods have further weighed on the yuan.
