China’s central bank vows to enhance yuan amid looming risks from strong US dollar
Adjustment of daily fixing seen as one way to resist depreciation pressure
China’s central bank has pledged to advance the cross-border use of the yuan and develop the offshore yuan market, as the mission to stabilise the currency grows more urgent in the face of a strong US dollar.
Following its macroprudential work conference for 2025, the People’s Bank of China said it would “enhance the yuan’s functions in cross-border payments, pricing and investment financing, further facilitating trade and investment”.
The PBOC also vowed to “develop offshore yuan markets, leverage currency-swap agreements and yuan-clearing banks, accelerate the development of Shanghai as an international financial hub, and consolidate Hong Kong’s status as a global financial centre”, according to a statement released on Thursday after the two-day gathering.
The announcement came as a persistently strong US dollar continues to pressure global currencies, with the Federal Reserve holding off on rate cuts and US President Donald Trump repeating threats to place tariffs on imports from the 10 emerging national economies that comprise the Brics bloc, in retaliation for their de-dollarisation efforts.
“The central bank has consistently held the yuan’s daily fixing firm during periods of depreciation, especially in the past decade, which could trade time for space until the US dollar retreats,” said Raymond Yeung, chief Greater China economist at ANZ Bank.
He added that the central bank sends a clear signal against yuan depreciation when it strengthens the countercyclical factor in the daily fixing, describing the bank’s credibility “as a key barrier stabilising the exchange rate”.
The PBOC set the fixing rate – also known as the midpoint rate – for the yuan at 7.1712 per US dollar on Thursday, compared with 7.1705 on Wednesday.
