Chinese yuan shows resilience amid depreciation against U.S. dollar: central bank deputy chief

The Chinese yuan demonstrated strong resilience in 2024 despite a depreciation against the U.S. dollar, Xuan Changneng, vice governor of the People's Bank of China (PBOC), the country's central bank, said on Tuesday.

Speaking at a press conference in Beijing about the financial sector's role in underpinning the country's high-quality development, Xuan attributed the yuan's resilience to China's stable economic fundamentals and proactive policy measures.

"The PBOC formulates monetary policy primarily based on domestic economic and financial conditions, while also taking into account the balance between internal and external factors. In 2024, amid a volatile and complex international landscape, multiple factors drove fluctuations and strengthening in the U.S. dollar index. China's foreign exchange market showed a remarkable resilience. The yuan exhibited two-way fluctuations in exchange rate and overall stability under the complex circumstances, outperforming many other major currencies. This resilience has created favorable conditions for China to independently implement monetary policies and played a positive role in stabilizing the economy and foreign trade," Xuan said.

The yuan depreciated by 2.8 percent against the U.S. dollar in 2024, closing at 7.2988 by the year-end. However, the yuan exchange rate index, which measures its value against a basket of currencies, or the CFETS, rose by 4.2 percent to 101.47. In the same period, the U.S. dollar index surged by 7 percent, further highlighting the yuan's resilience, according to Xuan.

Looking ahead, Xuan acknowledged challenges in the global economic landscape but expressed confidence in the yuan's stability.

"The external environment may become increasingly complex, severe and uncertain in a foreseeable future period of time. However, China's economic fundamentals remain solid, with a sustained current account surplus, independent and balanced cross-border capital flows, ample foreign exchange reserves, and a resilient foreign exchange market. These factors have injected certainties into and provided strong support for maintaining the yuan's overall stability in exchange rate," he said.

Xuan pointed to policy measures and foreign exchange market maturity as key factors underpinning the yuan's strength.

"China's macroeconomic foundation is more robust. A package of incremental policies introduced last year, particularly after September, are expected to deliver tangible results in succession. The Central Economic Work Conference outlined the implementation of more proactive fiscal measures and moderately accommodative monetary policies for 2025, which will further reinforce the positive momentum of China's economic recovery," he said.

"Foreign exchange reserves remain stable, serving as a cornerstone for maintaining economic and financial stability. The foreign exchange market becomes more resilient, with participants showing greater maturity, more rational trading behaviors, a growing focus on managing exchange rate risks through an increasing number of hedging tools. All these have laid an important microeconomic foundation for the steady operation of the foreign exchange market and the balance between foreign currency supply and demand. Currently, about 30 percent of cross-border trade in goods are settled in the yuan, and 27 percent of enterprises use foreign exchange hedging tools. We can see a pretty good microeconomic foundation for the foreign exchange market from these data," said the central bank deputy chief.

Chinese yuan shows resilience amid depreciation against U.S. dollar: central bank deputy chief

A major port in northern Venezuela came under U.S. airstrikes in the early hours of January 3, which caused extensive damage to civilian infrastructure, destroyed critical medical supplies in a warehouse, and severely impacted centuries-old cultural heritage sites, according to local residents.

The La Guaira Port, a vital hub for imports that support daily life in the region, was heavily damaged during the attack.

Large quantities of medical supplies stored at the port were destroyed. A historic cultural building dating back for some 300 years was also badly damaged by the bombardment.

Residents living near the port recalled the terrifying scenes as explosions shook nearby neighborhoods.

Humberto Bolivar, who lives in a community separated from the port by only a main road, said the blast waves shattered his home's windows, while stray shrapnel struck the water tank on his roof. According to reports, three missiles were fired at the port that night.

Bolivar said that beyond material losses, he is most concerned about the psychological impact on his children, who remain too frightened to leave their home days after the attack.

"The United States invaded our country. The children were frightened. This is not good for them, because it leaves some children with psychological trauma. They do not want to go to school or leave the house, because they are afraid that something worse might happen. We truly do not want this to happen to our country," he said.

Apart from civilian facilities, local cultural heritage site was also affected.

The La Guaira state government building, a structure with nearly 300 years of history and once served as the site of Venezuela's first national customs office, was struck by the force of the explosions.

Windows of the building were shattered, and furniture scattered across the floor.

"As people of La Guaira, we feel deep pain. Our cultural heritage has been bombed. We are living in constant anxiety and suffering, and life can no longer be the same as it was before," said a local named Henry Cumares.

The U.S. side has claimed the airstrikes targeted warehouses allegedly used to store narcotics. However, locals refuted such accusation.

"According to what Donald Trump said, they bombed this place using the excuse that the warehouses here were used to store drugs at the port. But based on the video released by our governor, these warehouses that were burned contained medicine for kidney patients and foods. Many people depend on these supplies to survive. I think the bombing is extremely despicable," said a local resident named Alejandro Capriles.

US strike hits Venezuelan port, wrecking medical supplies, heritage building