(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 present trend is unsustainable and market participants shouldn’t wager it will continue, Shanghai Securities News and China Securities Journal both reported on Monday, citing analysts. The yuan has gained more than 4% this year and advanced past 7 per dollar last week in offshore trading for the first time since September 2024.
“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 comments from the two state-owned newspapers add to signs the authorities are growing more concerned about the yuan’s rapid advance. This may possibly be just the start of a broader initiative to rein in further gains, meaning the yuan could have a more bumpy trajectory in 2026.
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.
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“Two-way fluctuations will remain the norm” for the yuan due to external uncertainties and interest-rate differentials, the China Securities Journal said.
The onshore yuan weakened 0.1% Monday to 7.0126 per dollar, while the offshore currency fell the same amount to 7.0109.
Beijing has long sought to prevent what is 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.
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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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