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
A celebration event is taking place at Corniche, Abu Dhabi, to mark the 40th anniversary of the establishment of diplomatic relations between China and the United Arab Emirates (UAE), presenting a carnival of cultural exchanges between the two peoples.
The three-day event, named "Building Bridges for the Future: UAE-China", opened Friday under the theme of "Reflecting on the Past, Present, and Future."
Visitors to the event are immersed in a vibrant blend of Chinese and Emirati culture, featuring interactive workshops that encourage attendees to explore traditional crafts from both countries.
Through hands-on activities like calligraphy, fan painting and basket weaving, guests have the opportunity to engage with artistry that has been passed down through generations, celebrating the shared values of craftsmanship and heritage.
Artisan stalls along the Corniche showcase handcrafted goods from both Chinese and Emirati artists, offering a close-up glimpse into the cultural richness of each country.
"That's really a very nice chance to a lot of people anyway, and also in China to know what's going on between these two countries. And 40 years of relationship - it's a big period and very interesting. Here on the events today we saw a lot of different culture between the two countries. Everyone happy, everyone likes to know some things about the other country. Like for example, for me I would like to know what's about the Chinese culture, and also the Chinese people want to know that Arabic culture. So I find this a very nice chance for people to know about China and the UAE," said Sultan Alkaabi, a UAE visitor.
The event has attracted many local people. In addition to showcasing traditional handicrafts from the two countries, food tasting is also a highlight.
"On such a special day, the UAE royal family and government decided to host a unique event to celebrate the establishment of diplomatic relations at the most vibrant Corniche in central Abu Dhabi. I felt a strong sense of friendship in the air. I have learned that this event was personally organized by Sheikha Maryam, President Sheikh Mohamed bin Zayed Al Nahyan's eldest daughter, and she focused on every detail. This truly reflects the UAE royal family's significant commitment to the event of 40th anniversary of diplomatic relations between China and the UAE," said Zhang Yiming, China's ambassador to the UAE.
Celebration event held in Abu Dhabi to mark 40 years of China-UAE diplomatic ties