(Dec 29): Chinese state media has cautioned against making one-way bets on the yuan, signalling growing official discomfort about the pace of recent gains in the currency.
The yuan’s current trend is unsustainable and market players shouldn’t expect it to last, Shanghai Securities News and China Securities Journal said Monday (Dec 29) while the People’s Daily said two-way moves are the norm. The yuan has gained more than 4% in 2025 and rose past seven per dollar last week in offshore trade for the first time in over a year.
“Never bet on a one-sided appreciation of the renminbi,” Shanghai Securities News said in an article. “Several experts also said that companies and financial institutions should adhere to the principle of risk neutrality and strengthen exchange rate risk management.”
The latest round of warnings adds to efforts by the authorities to slow the yuan’s gains. The central bank on Friday pledged to strengthen efforts to guard against “overshooting risks” and has set its daily fixing weaker than market forecasts on every day for the past two weeks. State-owned banks also bought dollars when the onshore yuan approached the seven per dollar level.
The increase in state-media messaging is just the latest sign the authorities are growing more concerned about the yuan’s rapid advance. A stronger currency is seen by many analysts as being harmful for China’s economy as it makes exports less competitive and can add to deflationary pressure.
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While upward pressure on the yuan is rising, China won’t allow its currency to appreciate significantly and officials have ample policy tools to prevent it, the Shanghai Securities News quoted Guolian Minsheng Securities Co analyst Shao Xiang as saying.
“Two-way fluctuations will remain the norm” for the yuan due to external uncertainties and interest-rate differentials, the China Securities Journal said. The People’s Daily, a newspaper seen to represent the official view of the Communist Party, said “two-way fluctuations and greater flexibility in the yuan exchange rate are the norm.”
The onshore yuan weakened 0.1% Monday to 7.0126 per dollar, while the offshore currency fell the same amount to 7.0109.
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While the yuan has strengthened against the dollar this year, the currency has weakened against the majority of its other counterparts. An official gauge measuring the yuan’s strength on a trade-weighted basis has dropped 3.8% in 2025.
Beijing has long sought to prevent what it considers excessive moves in the yuan. The People’s Bank of China will maintain flexibility while guiding expectations and guarding against “overshooting risks”, according to its 2025 financial stability report published last week.
The state media articles “show that the authorities are not keen to allow one-sided rapid appreciation in the yuan,” said Carie Li, a global market strategist at DBS Bank in Hong Kong. “A gradual rise with two-way volatility is probably acceptable.”
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