China's Yuan Falls to 16-Month Low as Markets React to US Tariff Concerns

Beijing moves to stabilize its currency and reassure investors as Donald Trump's second term raises fears of heightened trade tensions.

The yuan dropped to 7.3301 per US dollar, its weakest level since September 2023, reflecting investor concerns over impending US tariffs under President-elect Donald Trump.
China's central bank, the PBOC, has emphasized its commitment to maintaining currency stability, shifting its policy rhetoric from 'flexibility' to 'resilience' in recent statements.
The CSI 300 stock index recorded significant losses, closing down 0.2% on Monday after experiencing its steepest weekly drop in over two years last week.
The PBOC has set a stronger daily reference rate for the yuan, resisted market pressure for further depreciation, and taken steps to prevent one-sided market expectations.
Economic challenges, including deflationary pressures, falling bond yields, and low confidence in government stimulus measures, continue to weigh on China's financial markets.