The People's Bank of China (PBOC) has recently made several adjustments to its monetary policy, including selling 7-day reverse repos worth 4.10 billion yuan at an interest rate of 1.5%. Additionally, the PBOC reduced its open market operations by 20.7 billion yuan. On January 9, the PBOC drained 20.7 billion yuan into the market while 24.8 billion yuan was due. The offshore Chinese yuan's 1-month Hong Kong Interbank Offered Rate (HIBOR) has reached its highest level since April, while overnight HIBOR has decreased from its highest level since 2021. As liquidity pressures ease, HIBOR rates for the offshore yuan have declined across all tenors. Furthermore, short positions on the Chinese yuan are at their highest in 18 months, indicating increased bearish sentiment among traders. The PBOC has also paused government bond purchases in the open market, contributing to a 0.1% advance in the offshore yuan.