The offshore yuan rose toward 6.34 per dollar on Friday and was set for its second straight weekly gain, even after Beijing stepped up its policy easing efforts to shore up growth. The People’s Bank of China slashed the 1-year LPR by 10 bps to 3.7% and the mortgage benchmark by 5 bps to 4.6% on Thursday, following a surprise cut to the 1-year MLF on Monday. China’s policy moves contrasted with other major economies which are on track to normalize monetary settings this year, prompting Chinese president Xi Jinping to caution against a rapid rise in global interest rates in the Davos Agenda virtual event earlier this week. Analysts expect the PBOC to bring forward its easing measures in the first half of the year, with more rate cuts and a reduction in the bank’s reserve requirement ratio in the first quarter. The currency has been supported by strong seasonal corporate demand and a record trade surplus as Chinese exports remained robust in December.
Historically, the Chinese Yuan reached an all time high of 8.73 in January of 1994. Chinese Yuan - data, forecasts, historical chart - was last updated on January of 2022.
The Chinese Yuan is expected to trade at 6.36 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 6.41 in 12 months time.