Chinese Yuan: PBoC defends yuan narrative – Commerzbank
Commerzbank’s FX team highlights that the People’s Bank of China rejected claims the yuan is undervalued, linking export strength to industrial competitiveness rather than currency manipulation.
The People's Bank of China (PBoC) defended the value of the Chinese yuan, rejecting claims that it is undervalued. The central bank argued that strong export performance reflects industrial competitiveness rather than currency manipulation. China will begin reporting foreign exchange operations to the International Monetary Fund (IMF) starting in 2027, following longstanding calls for increased transparency.
At the end of September, China's foreign exchange reserves were reported to be at USD3.40tn, slightly lower than the Bloomberg consensus figure of USD3.43tn. In foreign exchange markets, the USD/CNY pair fell 30 pips to 6.70, while USD/CNH remained relatively unchanged at 6.70. EU trade officials began two days of talks with Chinese counterparts, with Brussels increasingly framing trade imbalances as a currency issue.
The PBoC's policy paper suggests Beijing aims to shape the narrative before any formal demands for exchange rate adjustments can gain traction.
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