Chinese yuan hits highest level against dollar in 16 months due to stimulus policies, US Fed rate cut: experts

The offshore Chinese currency yuan briefly rallied past the 7.0 per dollar milestone for the first time in 16 months on Wednesday, as investors digested China's stimulus measures to stabilize growth and the recent U.S. Fed rate cut kept the dollar on the back-foot.

China's central bank governor Pan Gongsheng Tuesday said that the country will cut the reserve requirement ratio (RRR) by 0.5 percentage point in the near future, providing about 1 trillion yuan (about 142.30 billion U.S. dollars) in long-term liquidity to the financial market.

Depending on the liquidity situation in the market, the RRR may be further lowered by 0.25 to 0.5 percentage point within the year, Pan told a press conference in Beijing.

Meanwhile, the U.S. Federal Reserve announced last week that it will slash the target range for the federal funds rate by 50 basis points, marking the first rate cut since March 2020 and signaling the start of a monetary policy easing cycle.

"On the one hand, as U.S. Federal Reserve kicked off a monetary policy easing cycle, the interest rate difference between the Chinese and U.S. currencies narrowed. On the other, the resilience of China's foreign trade and its high trade surplus have helped stabilize the Chinese yuan exchange rate. The recent introduction of a host of policies to stabilize growth has also significantly boosted market confidence," said Wen Bin, chief economist at the Beijing-based China Minsheng Bank.

Recently, the supply and demand of the foreign exchange market have become more balanced. Data released by the State Administration of Foreign Exchange showed that in August, the cross-border income and expenditure volume of enterprises, individuals and other non-bank sectors has changed from a deficit previously to a surplus of 15.3 billion U.S. dollars.

"The appeal of Chinese yuan assets has increased dramatically, attracting the inflow of overseas capital, and further promoting steady performance and gradual improvement of the Chinese yuan exchange rate. We have every reason to believe that with the continued support of policies and the fundamentals of the economy, the Chinese yuan exchange rate can stay in a balanced range and perform well," said Tian Lihui, director of the Institute of Finance and Development at the Nankai University in north China's Tianjin Municipality.

Chinese yuan hits highest level against dollar in 16 months due to stimulus policies, US Fed rate cut: experts

Chinese yuan hits highest level against dollar in 16 months due to stimulus policies, US Fed rate cut: experts

The operational efficiency of Guangzhou Baiyun International Airport in south China's Guangdong Province has greatly improved following the launch of a new terminal and a new runway one month ago.

The airport officially put into operation its Terminal 3 and fifth runway on October 30, making it China's first civil airport to operate five commercial runways.

Terminal 3 features a range of self-service facilities, including check-in kiosks, automated baggage drop systems, and smart security screening equipment, which have greatly streamlined passenger processing.

Since its opening, five airlines have shifted their domestic operations to Terminal 3, which now handles an average of 158 flights and about 26,000 passengers daily.

"Compared with Terminal 1, both the number of staffed counters and self-service kiosks of Terminal 3 have increased significantly, greatly reducing the average check-in time for passengers. For domestic direct flights, the entire check-in process can be completed in a minimum of one minute," said Shi Mengyao, a staffer with the ground service department of the Guangdong branch of China Eastern Airlines.

Beyond efficiency improvements, the terminal also includes an observation deck that offers travelers panoramic views of the airfield.

"Since its opening, the observation deck attracts over 3,000 visitors per day on average, with total visits exceeding 100,000 to date," said Luo Li, deputy general manager of a terminal management company at Baiyun International Airport.

The airport's expansion also marks another step toward building a world-class airport cluster in the Guangdong-Hong Kong-Macao Greater Bay Area.

"The airport's expansion not only consolidates the Greater Bay Area as an aviation hub connecting China with the world, but also helps lower logistics costs within the area, promote the free flow and efficient allocation of economic resources, and enhances the area's capacity for global resource allocation," said Li Jing, chief planner with the Guangdong Provincial Department of Transport.

New terminal, runway boost operational efficiency of airport in Guangzhou