Yuan Soars to a Yearly High Following Beijing’s Stimulus Measures and Interest Rate Cuts

The yuan, China's currency, keeps on rising following the launch of Beijing's stimulus package. On Wednesday, the yuan hit its peak value in more than a year, spurred by the Chinese central bank's recent interest rate reductions and new initiatives.

On Wednesday morning, the value of the offshore yuan surged, surpassing the 7 per US dollar mark for the first time since May 2023. The People's Bank of China established the exchange rate at 7.0202 per US dollar that same day, an increase from the previous day's rate of 7.051.

Ding Shuang, who is the chief economist for Greater China at Standard Chartered, attributed the recent rise in the yuan's value mainly to "market predictions based on economic basics."

Ding noted that the rate reduction by the PBOC has increased the rate difference. However, the measures introduced on Tuesday were more robust than anticipated, signifying a significant move. These measures have sparked market expectations for additional economic support.