Offshore Yuan Extends Gains to Over 4-Year High

The offshore yuan strengthened to around 6.68 per dollar on Tuesday, extending its winning streak to a fourth straight session and hitting its strongest level since June 2022, as stronger economic growth reduced the urgency for further monetary easing. The PBoC kept the one-year LPR unchanged at 3% and the five-year rate at 3.5%, holding both at record lows for the 17th consecutive meeting. China’s GDP grew 4.5% yoy in Q3 2026 from Q2’s three-year low and keeping the government’s FY growth target of 4.5%—5% within reach. This gives policymakers more room to hold off on additional easing after rolling out fresh targeted measures to support the domestic economy. Meanwhile, PBoC Governor Pan said the PBoC would continue reforming its monetary policy framework, with greater emphasis on short-term interest rates. The LPR could remain the benchmark for small business and personal loans, while the overnight interbank repo rate could serve as a benchmark for bonds and financial derivatives.