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China’s yuan has rallied since the beginning of 2023, as the country eases its COVID-19 control measures and reopens its borders. The Chinese currency’s exchange rate against the U.S. dollar breached 6.7611 on Tuesday, a rise of 654 basis points, according to the China Foreign Exchange Trade System.
Additionally, the offshore yuan’s exchange rate against the greenback, which reflects international investors’ confidence in the Chinese currency, also touched 6.77 during the afternoon trading.
This marks the sixth consecutive day of gains for the yuan and the first time it has fallen below 6.8 to the dollar since August 2022.
According to Zhao Qingming, vice president of the China Foreign Exchange Investment Research Institute, the strong yuan reflects optimism surrounding China’s economic prospects for 2023 and market confidence in the country.
Wang Youxin, a senior researcher at the Bank of China, added that industries with a high proportion of dollar debt, such as airlines, are expected to see considerable exchange gains from the yuan’s strong rebound.
Moreover, he added that industries with high exposure to imported raw materials denominated in dollars might also see a reduction in import costs. – CGTN
Online Reporter