The offshore yuan steadied near 7.28 per dollar amid efforts by Beijing to support the currency through swaps by state-owned banks in offshore markets to suck out yuan and raise the cost of shorting the currency, as reported by Reuters. The People’s Bank of China has also been setting stronger-than-expected daily midpoint rates on the yuan in recent sessions. Still, the currency remains close to its lowest levels in over nine months as the PBOC lowered its one-year loan prime rate by 10 basis points to a record low of 3.45% on August 21, but kept the five-year loan prime rate unchanged at 4.2%. The central bank also slashed its seven-day reverse repo and one-year medium-term lending facility rates earlier this month. Moreover, heightened economic uncertainties and a deepening property sector crisis in China, as well as a widening interest rate differential weighed further on the yuan.
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 August of 2023.
The Chinese Yuan is expected to trade at 7.38 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 7.65 in 12 months time.