Shanghai [China], April 10 : China's currency slumped to its lowest level against the US dollar in over a year and a half on Tuesday, after the central bank set a weaker-than-expected reference rate amid intensifying trade tensions with Washington, Nikkei Asia reported.
The People's Bank of China's (PBOC) latest move signalled a possible shift in its stance on currency stability, raising market expectations of further depreciation.
The onshore yuan fell to 7.34 per US dollar, its weakest point since September 2023. Meanwhile, the more freely traded offshore yuan also declined, touching around 7.352 per dollar. This came after the PBOC fixed the daily reference rate at 7.2038 down from 7.198 the previous day setting the stage for the yuan to trade within a weaker band in mainland China.
By adjusting the midpoint rate downward, the PBOC appears to be allowing the tightly managed yuan to fall in order to help offset the economic impact of escalating US tariffs.
US President Donald Trump on Monday threatened a further 50 per cent tariff on Chinese goods unless Beijing rolls back its retaliatory measures, prompting a sharp response from China's Ministry of Commerce, which called the threat "another mistake" and vowed to "fight to the end," reported Nikkei Asia.
China's Foreign Affairs Ministry spokesperson, Mao Ning, posted a video of Chairman Mao with a curt message, We are Chinese. We are not afraid of provocations. We don't back down."
Meanwhile, Chinese Commerce Minister Wang Wentao met with representatives of EU and Malaysia - the rotating chair of ASEAN - via video, respectively. They had an in-depth and candid exchange of views on strengthening bilateral economic and trade cooperation and responding to the reciprocal tariffs imposed by the US.
The Chinese stock market also rallied strongly on Thursday morning. In the A-share market, the Shanghai Composite Index opened 1.29 percent higher, the Shenzhen Component Index opened 2.29 percent up, and the ChiNext Index soared 3.35 percent at the market opening.
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