The quotation of the Chinese currency, the yuan, against the US dollar, today reached the highest value since mid-September, after China relaxed epidemic prevention measures, signaling the end of the ‘zero covid’ strategy.
According to the official exchange rate, defined daily by the People’s Bank of China (central bank), one dollar was worth 6.9515 yuan, in the middle of today’s session, settling, for the first time since September 16, below 7.
The offshore rate – traded on international markets – stood at 6.94885, also the highest quotation since mid-September.
Chinese currency is not fully convertible. The Chinese central bank daily sets a parity rate for the value of the yuan against the US dollar. The Chinese currency can fluctuate up to 2% against this reference rate.
Between late October and early November, the Chinese currency reached the lowest exchange rate levels since 2007, following the 20th Congress of the Communist Party of China (CPC).
The new formation of the Polibturo Standing Committee, China’s top power, has been poorly received by investors in the absence of market-oriented economic reformers.
However, since then, the yuan has recovered about 5% against the dollar.
Chinese financial markets also recorded strong gains today. The Hang Seng index, the Hong Kong Stock Exchange, rose 3.46%, in the middle of today’s session, while in Shanghai the recovery was 1.56% and in Shenzhen 0.65%.
*With Lusa
