China's central exchange rate also surpasses 7 yuan... 'Pochi' after about 5 months

The central parity rate of the Chinese yuan against the US dollar, set by the People's Bank of China (PBOC), surpassed 7 yuan on the 19th.

The Foreign Exchange Trading Center under the PBOC announced on its website that the yuan-dollar exchange rate was set at 7.0356 yuan per dollar (approximately 1,328.67 KRW), up 0.0389 yuan (0.55%) from the previous trading day. This is the first time since December 5, 2022 (7.0384 yuan) that the PBOC's reference rate has exceeded 7 yuan.

[Image source=Yonhap News]

The exchange rate of "7 yuan per dollar" is considered a psychological support level in the Chinese currency market. There is even a specific term, "Pochi (破七)," referring to the yuan-dollar exchange rate breaking through 7 yuan. However, the PBOC appears to have tolerated the yuan's depreciation without significant foreign exchange market intervention, in line with its previously stated monetary policy.

The decline in the yuan's value reflects concerns over delayed economic recovery following the recent release of key Chinese economic indicators for April that fell short of expectations. China's manufacturing Purchasing Managers' Index (PMI) for April stood at 49.2, dropping below the baseline of 50 for the first time in four months. Retail sales increased by 18.4% year-on-year, below the forecast of 21.0%, and industrial production growth was a disappointing 5.6%, compared to the expected 10.9%. Notably, the youth unemployment rate, a "pain point" for the Chinese economy, reached a record high of 20.4%.

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