(4 March 2025 – China) China’s central bank has vowed to advance Renminbi (RMB) internationalisation and develop the offshore market to stabilise the currency in the face of robust US dollar strength.
The People’s Bank of China (PBoC) is seeking to enhance RMB functions in cross-border payments, pricing and investment financing, further facilitating trade and investment. Historically the central bank has utilised several tools to stabilise the RMB, such as tightening the management of cross-border capital flows and guiding market expectation.
A persistently strong US dollar continues to pressure global currencies with the Federal Reserve holding off on rate cuts and US President Donald Trump repeating threats to place tariffs on imports from the ten emerging national economies that comprise the BRICS bloc in retaliation for their de-dollarisation efforts.
The PBoC also pledged to “develop offshore RMB markets, leverage currency-swap agreements and RMB-clearing banks, accelerate the development of Shanghai as an international financial hub, and consolidate Hong Kong’s status as a global financial centre”.
“The central bank has consistently held the yuan’s daily fixing firm during periods of depreciation, especially in the past decade, which could trade time for space until the US dollar retreats. The central bank sends a clear signal against yuan depreciation when it strengthens the countercyclical factor in the daily fixing” stated ANZ Greater China Chief Economist, Raymond Yeung.