Skip to content

Yuan Losses Deepen Highlighting Limits of PBOC Currency Defense

  • PBOC sets stronger-than-expected fixings for 21 straight days
  • Move follows Federal Reserve’s third 75 basis point rate hike
Updated on

China’s yuan is set for its longest losing streak since June even after the central bank sought to support the currency with stronger-than-expected fixings in every single session for nearly a month. 

The onshore yuan slid for the fourth straight day to trade just 0.5% shy of the weak end of its allowed trading range with the greenback following the Federal Reserve’s jumbo rate hike. The currency can trade up to 2% on either side of the fixing. The dollar-yuan’s discount to the fixing has also widened to 1,000 pips, a gap unseen since 2019. The moves suggest that Beijing’s efforts to stem the currency’s depreciation have done little to restore confidence.