Yuan Official Exchange Rate at 7.1092 Yuan... Down After 4 Days

[Asia Economy Beijing=Special Correspondent Park Sun-mi] The yuan exchange rate, which had been rising daily due to the US-China conflict over the Hong Kong National Security Law (Hong Kong Security Law), fell for the first time in four trading days.

On the 27th, the People's Bank of China announced the yuan reference rate against the dollar at 7.1092 yuan, down 0.28% from the previous day. This is the first decline in the yuan exchange rate in four trading days since the 21st.

The previous day, the yuan exchange rate reached 7.1293 yuan per dollar, the highest level since February 27, 2008. This means the yuan's value against the dollar has dropped to its lowest level in over 12 years. Since the yuan exchange rate traded in the foreign exchange market can fluctuate within a 2% range above or below the reference rate, the reference rate announced by the People's Bank of China serves as the benchmark for exchange rate movements.

Although the yuan exchange rate's upward trend paused on this day, the draft bill for the Hong Kong Security Law is expected to be passed by vote at the closing ceremony of the National People's Congress on the 28th, so the increased volatility of the yuan exchange rate is likely to continue for the time being. In fact, on the morning of this day, the yuan exchange rate against the dollar in the Hong Kong offshore market rose intraday to 7.1547 yuan, approaching the peak of 7.1959 yuan per dollar recorded last September during the height of the US-China 'currency war.'

Moreover, China's announcement in this year's government work report to significantly raise the fiscal deficit ratio relative to GDP from the previous 2.8% to '3.6% or higher' for large-scale economic stimulus provides an escape route that could allow further yuan depreciation without raising suspicions of 'deliberate currency manipulation' as claimed by the US. Zhou Hao, an economist at Commerzbank, said, "The People's Bank of China is likely paying close attention to whether the yuan breaks through 7.2 yuan per dollar," adding, "Depending on how US President Donald Trump reacts to the Hong Kong issue, the yuan's volatility is expected to increase further for the time being."

This content was produced with the assistance of AI translation services.