It extended its support to its national currency, Wan, or , by setting the daily reference rate at a level stronger than 7.2 per dollar, as the escalating trade tensions with the devaluation pressures of Wan increase. The People’s Bank of China determined the so-called fixing at 7,1693 per dollar today (5.2.25), as markets reopened after the Lunar New Year vacation. The central bank keeps fixing at levels stronger than 7.2 per dollar to shield the wan from dollar profits since Donald Trump won the presidential election in the US in November. CORVERSE This move marks that authorities are not willing to let the Wan weaken, even when the latest trade measures tit-for-tat between the US and China are burdening the currency. Some analysts expected that the People’s Bank of China would let Wan weaken in order to increase the attractiveness of Chinese exports and mitigate the impact of American duties, a claim that has not yet been implemented. “The status quo of Wan’s support for its definition is consistent with the attitude to avoid further escalation of tensions between China and the US,” said Ken Cheung, chief strategic exchange analyst in Asia, Mizuho Bank. “China shows attitude to maintaining exchange balance stability, which could limit capital outflow pressure”.
China maintains Wan’s support through daily definition amid trade war
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