Offshore Yuan Lingers Near 2022 High

The offshore yuan strengthened to around 6.69 per dollar on Thursday, lingering near its strongest level since July 2022 even as the IMF said China’s stimulus efforts were insufficient and flagged the currency’s undervaluation. Beijing has introduced mortgage subsidies and expanded central bank support for targeted sectors, while the State Council pledged to roll out “a package of practical and effective additional policies” to meet this year’s economic goals. However, the IMF has called for more ambitious measures, estimating that the yuan is undervalued in real terms by 17.3% to 25.3% in 2026, with a midpoint of 21.3%. China’s currency valuation has become a flashpoint in global trade discussions, with debate centering on whether it drives trade imbalances or reflects broader economic conditions. The PBoC argued that the IMF’s assessment does not constitute a judgment on the yuan’s nominal exchange rate or justify calls for a deliberate appreciation against specific currencies.