China takes steps to support yuan amid trade surplus

The offshore yuan remained steady at around 7.33 per dollar after China intensified efforts to support the currency. It issued a warning and adjusted capital controls following its decline near a record low.

China takes steps to support yuan amid trade surplus

The People’s Bank of China (PBOC) and other regulators are set to enhance the management of the foreign exchange market, address disruptive activities, and prevent risks of excessive yuan depreciation. The central bank also raised the macro-prudential parameter for cross-border funding to 1.75, allowing for more overseas borrowing. These measures aim to bolster the yuan amid a weaker domestic economy, a stronger dollar, and concerns over US tariffs. The PBOC has been fixing the reference rate above 7.2 and is planning a record bill issuance in Hong Kong to increase demand for the yuan.

China's trade surplus soars to $104.84B in December

Meanwhile, the latest data revealed that China’s trade surplus surged to USD 104.84 billion in December, the largest surplus since February 2024, with exports rising 10.7% year-on-year, all-surpassing expectations.