Offshore yuan holds near 18-month high as Beijing pushes internationalization drive
The currency stayed around 6.74 per dollar, supported by wider yuan settlement links as China expanded efforts to reduce reliance on the US dollar and investors watched for trade data.
The offshore yuan held around 6.74 per dollar on Friday, staying near its strongest level since early February 2023 as Beijing's push to internationalize the currency continued to support demand. Chinese commercial banks have added roughly a dozen currencies to their direct yuan settlement and clearing networks, including the Thai baht, Brazilian real and Kazakhstani tenge, a move expected to help Chinese companies cut dependence on the US dollar as trade ties and overseas investment expand. The effort also aligns with President Xi Jinping's stated ambition to build a "powerful currency." Investors were also awaiting upcoming trade data after China rolled out fresh retaliatory steps against the US, including tighter drone export controls, sanctions on seven American firms and its first national security probe linked to foreign trade.
- offshore yuan: The version of China's currency traded outside mainland China, often used as a market-based gauge of yuan sentiment.
- settlement and clearing networks: Banking infrastructure used to process, pay and finalize cross-border transactions in a given currency.
- internationalization: The process of expanding a currency's use in global trade, investment and financial transactions.