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.