RMB Weakens Against Dollar as PBOC Tolerates Gradual Strength
The Renminbi (RMB) ended a volatile week weaker against the US dollar despite briefly reaching its strongest level in more than three years. The onshore USD/CNY closed at 6.7133 on September 25, up from 6.6977 a week earlier, meaning the RMB weakened by 0.0156 yuan, or 0.23%. Offshore USD/CNH rose more sharply, from 6.6954 to 6.7230, a 0.41% RMB decline.
The reversal is significant because it shows that even as Beijing becomes more comfortable with currency appreciation, global interest-rate expectations can still overpower domestic policy signals. The People's Bank of China (PBOC) has sent its clearest signal in months that it is prepared to tolerate a stronger currency. Its USD/CNY fixing strengthened from 6.7521 on September 18 to 6.7487 on Monday, the strongest since February 2023.
The RMB performed more strongly against several other major currencies, with EUR/CNY falling from 7.6930 to 7.6474, meaning the RMB gained about 0.59% against the euro. GBP/CNY dropped from 8.9715 to 8.8967, an RMB gain of roughly 0.83%. The Australian dollar weakened more sharply, with AUD/CNY falling from 4.7718 to 4.7150, leaving the RMB about 1.19% stronger.