*(CN) CHINA TOP POLICYMAKERS SAID TO CONSIDER YUAN (CURRENCY CNY) TO WEAKEN IN 2025 AMID TRUMP'S TARIFFS THREAT; PBOC said to have considered the possibility the yuan could drop to 7.50 level to US dollar to counteract any trade shocks - press [**Note: China is holding Central Economic Work Conference (CEWC) on Dec 11-12th]
Wednesday, December 11, 2024 2:08:34 AMEST
- While the PBOC is unlikely to say it will no longer uphold the currency, it will reportedly emphasize allowing the markets more power in deciding the yuan's value
**Note: During Trump's first term as president, the yuan weakened more than 12% against the dollar during a series of tit-for-tat tariff announcements between March 2018 and May 2020.
- Follow Up: 07:15 ET China PBoC State-back paper: CNY currency (Yuan) exchange rate remains basically stable
History of the CNY
- In Aug of 2015, China devalued the yuan, as the USD/CNY mid-point was set on Aug 16th 2015 at 6.2298 v 6.1162 prior
- Mar 16th 2014 PBOC: Widened the yuan daily trading band to 2.0% from 1.0%
- April 13th 2012 China PBOC: Widens yuan daily trading band against the USD. Would allow the daily trading range against the dollar to range 1.0% above or below the daily reference exchange rate, widened
- On Jun 21st 2010 China's central bank (PBoC) pledged to increase the Yuan currency (CNY) flexibility. It added that affirmed 0.5% trading band in Yuan to remain and for the Yuan to stay essentially stable. (The trading band was last widened to 0.5% from 0.3% in May 2007)
- China re-pegged the USD/CNY back in July 2008 at roughly 6.82 level during the financial crisis and removed the pag in June 2010)
- On July 21st 2005 The PBoC announced reforming the RMB Exchange Rate Regime in which by moving into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. RMB will no longer be pegged to the US dollar and the RMB exchange rate regime will be improved with greater flexibility.
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**Note: During Trump's first term as president, the yuan weakened more than 12% against the dollar during a series of tit-for-tat tariff announcements between March 2018 and May 2020.
- Follow Up: 07:15 ET China PBoC State-back paper: CNY currency (Yuan) exchange rate remains basically stable
History of the CNY
- In Aug of 2015, China devalued the yuan, as the USD/CNY mid-point was set on Aug 16th 2015 at 6.2298 v 6.1162 prior
- Mar 16th 2014 PBOC: Widened the yuan daily trading band to 2.0% from 1.0%
- April 13th 2012 China PBOC: Widens yuan daily trading band against the USD. Would allow the daily trading range against the dollar to range 1.0% above or below the daily reference exchange rate, widened
- On Jun 21st 2010 China's central bank (PBoC) pledged to increase the Yuan currency (CNY) flexibility. It added that affirmed 0.5% trading band in Yuan to remain and for the Yuan to stay essentially stable. (The trading band was last widened to 0.5% from 0.3% in May 2007)
- China re-pegged the USD/CNY back in July 2008 at roughly 6.82 level during the financial crisis and removed the pag in June 2010)
- On July 21st 2005 The PBoC announced reforming the RMB Exchange Rate Regime in which by moving into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. RMB will no longer be pegged to the US dollar and the RMB exchange rate regime will be improved with greater flexibility.