Offshore Yuan Rallies to Over 4-Year High

2026-11-02 04:29 By Czyrill Jean Coloma 1 min. read

The offshore yuan strengthened to around 6.64 per dollar on Monday, extending its winning streak to a fifth consecutive session and reaching its strongest level since June 2022, after the People’s Bank of China announced a shift in its short-term monetary policy framework toward the overnight rate.

Under the new framework, the central bank will introduce daily overnight reverse repo operations at a fixed rate of 1.25%, bringing the overnight rate closer to becoming its primary policy anchor and gradually replacing the long-standing seven-day benchmark.

The newly disclosed 1.25% rate is below the existing 1.4% seven-day reverse repo rate and broadly in line with market expectations and prevailing borrowing costs.

Meanwhile, weak official PMI data highlighted persistent economic headwinds.

Manufacturing PMI fell to a three-month low of 49.3 in October 2026 from 50.1 in September.

Non-manufacturing PMI also declined to 49.7 from 50.2, signaling a contraction for the sixth time in 2026.



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Offshore Yuan Rallies to Over 4-Year High
The offshore yuan strengthened to around 6.64 per dollar on Monday, extending its winning streak to a fifth consecutive session and reaching its strongest level since June 2022, after the People’s Bank of China announced a shift in its short-term monetary policy framework toward the overnight rate. Under the new framework, the central bank will introduce daily overnight reverse repo operations at a fixed rate of 1.25%, bringing the overnight rate closer to becoming its primary policy anchor and gradually replacing the long-standing seven-day benchmark. The newly disclosed 1.25% rate is below the existing 1.4% seven-day reverse repo rate and broadly in line with market expectations and prevailing borrowing costs. Meanwhile, weak official PMI data highlighted persistent economic headwinds. Manufacturing PMI fell to a three-month low of 49.3 in October 2026 from 50.1 in September. Non-manufacturing PMI also declined to 49.7 from 50.2, signaling a contraction for the sixth time in 2026.
2026-11-02
Chinese Yuan traded below 6.65
The US Dollar exchange rate decreased below 6.65 Chinese Yuan in the foreign exchange interbank market.
2026-10-30
Offshore Yuan Strongest Since 2022
The offshore yuan traded around 6.65 per dollar, reaching its strongest level since April 2022, supported by robust export growth and exporters converting dollar holdings into yuan. Exports surged 36.3% yoy to USD 447.18 billion in September 2026, marking the fastest annual growth in seven months, mainly due to robust global demand for electronics and semiconductors. Strong export performance helped the currency appreciate around 5% so far this year. Moreover, demand for the yuan remained firm as exporters stepped up dollar sales and hedging activity amid expectations of further appreciation. Meanwhile, the PBoC set its daily midpoint at 6.7138 per dollar, the strongest fixing since February 2023, though 590 pips weaker than Reuters' estimate. The gradual strengthening of the fixing suggests policymakers are comfortable with yuan appreciation but may seek to moderate its pace. The currency is on track to post its fourth consecutive monthly advance, having gained around 0.8% in October.
2026-10-30