The currency has gained nearly 9% against the dollar in 20 months, but analysts expect limited further appreciation this year.
China is slowing the yuan’s rally as weak domestic demand clouds the economic outlook and authorities seek to support exporters, market participants told Reuters.
The yuan has gained nearly 9% against the dollar over the past 20 months, reaching a three-and-a-half-year high. Traders cited falling turnover, less dollar selling by exporters, and the central bank’s daily trading-band settings as signs that policymakers want to limit further gains.
The median forecast from 12 global investment banks puts the yuan at 6.68 per dollar at year-end, close to Monday’s level of 6.72. Peter Berezin of BCA Research said he did not expect China to allow a significant strengthening against the dollar.
China’s record trade surplus, which topped $1 trillion, has supported the currency through exporter flows. But low interest rates, weak confidence, and sluggish consumption are encouraging capital outflows.
The People’s Bank of China has kept the yuan’s daily fixing weaker than market projections since November 2025. HSBC said the flat fixing suggested authorities were comfortable with a balanced currency, while state-owned banks have bought dollars in the onshore market.
Average daily turnover in the onshore spot market fell to $31.2 billion this month from $42.2 billion in July. Analysts still expect gradual long-term appreciation, with Goldman Sachs forecasting a dollar-yuan rate of 6.4 in 12 months.
