Authorities appear to be slowing the currency’s rise as exporters face weaker domestic demand and market turnover declines, Reuters reported.
China is slowing the yuan’s rally and is likely to limit further gains this year as authorities support exporters, market participants told Reuters.
The yuan has risen nearly 9% against the dollar over 20 months to a three-and-a-half-year high. Traders cited weaker exporter dollar selling, falling turnover and the central bank’s daily fixing as signs that policymakers want to temper the advance.
A median forecast from 12 global investment banks puts the yuan at 6.68 per dollar at year-end, compared with about 6.72 on Monday. Soft domestic demand is weighing on economic growth.
Average daily turnover in the onshore spot market has fallen to $31.2 billion this month, from $42.2 billion in July and $39.9 billion a year earlier. The dollar-to-yuan conversion ratio also fell to its lowest level in almost 18 months in July.
State-owned banks have repeatedly bought dollars in the onshore market, reinforcing expectations that officials want a more balanced yuan. The People’s Bank of China did not respond to Reuters’ questions.
Some analysts expect modest longer-term appreciation, but said low interest rates, capital outflows and weak domestic confidence make a sharp near-term rise unlikely. Goldman Sachs forecasts 6.4 per dollar in 12 months, while Macquarie expects 6.72 at the end of 2026.
