China’s yuan surges past 7 per dollar in strongest rally since 2024
The Chinese yuan has strengthened against the US dollar, breaking past 7 yuan per dollar for the first time since September 2024. Analysts point to a weaker greenback, increased capital inflows, and reduced geopolitical tensions as key drivers behind the rise. The currency’s gains have also been supported by seasonal factors and central bank adjustments.
On Thursday, the offshore yuan climbed 0.2% to 6.9964 per dollar, while on the mainland, it rose 0.1% to 7.0067. The People’s Bank of China responded by setting its daily reference rate at the highest level since last September, signalling controlled support for the currency’s appreciation.
Major Chinese banks were actively involved in trading, with reports of significant dollar sales and purchases around the 7.006 mark. Wang Zhin, chief macroeconomist at Golden Credit Rating, attributed the yuan’s gains to both the dollar’s decline and exporters converting foreign earnings into local currency. Despite the recent rally, many analysts argue the yuan remains undervalued. Goldman Sachs estimates it is still around 25% below levels justified by China’s economic fundamentals. Beijing, however, continues to manage the pace of appreciation carefully to maintain exchange rate stability.
The yuan’s current momentum suggests it could record its strongest performance against the dollar in five years. While the currency has made notable gains, its long-term trajectory will depend on global economic conditions and China’s monetary policies. For now, the controlled strengthening reflects both market forces and regulatory oversight.
