Investors are preparing for a gradual depreciation of the Chinese yuan against the U.S. dollar, influenced by falling domestic interest rates and the potential for new tariffs from the Trump administration. The People's Bank of China (PBOC) has indicated that it will enhance counter-cyclical policy adjustments to support the economy, which is facing challenges due to a slowing growth rate. PBOC Deputy Governor Xuan Changneng stated that the central bank will implement a moderately loose monetary policy in 2025 to achieve economic targets. Amid these developments, the yuan is trading near record lows in offshore markets, prompting the PBOC to emphasize its commitment to maintaining currency stability. Recent measures have slightly strengthened the yuan, but analysts caution that further depreciation may occur if tariffs are imposed. On January 14, the PBOC injected 959 billion yuan into the financial system to address liquidity issues ahead of the Lunar New Year, reflecting ongoing efforts to stabilize the economy amidst a complex policy landscape.
People's Bank of China pumps $131 billion into financial system on low liquidity #China #Liquidity
The Dollar has risen 5.5% since the US election on Nov. 5, outperforming significantly what it did after Trump's surprise win in 2016. None of this rally is about tariffs, because it has come mostly against Europe, while the Dollar is up much less against China and Japan... https://t.co/20ilFpgwyR
#股闻天下 专栏记者Jacky Wong写道,中国正在人民币汇率问题上走钢丝。经济基本面显示人民币应该贬值,但资本外流的阴影依然笼罩中国政府,让其对人民币的任何大幅波动都保持警惕。 https://t.co/VZjSGpCN0N