10 Yuan – People's Republic of China

In 2023, the People's Republic of China navigated a complex currency environment characterized by managed stability amid significant economic headwinds. The central theme was the People's Bank of China's (PBOC) careful balancing act to support a faltering post-pandemic recovery—marked by weak domestic demand and a property sector crisis—while preventing excessive depreciation of the renminbi (RMB) against a strong US dollar. The PBOC set the daily USD/CNY reference rate persistently stronger than market forecasts, a clear signal of its intent to curb one-way depreciation bets and maintain currency stability as a cornerstone of financial confidence.

The RMB faced substantial downward pressure throughout much of the year, primarily driven by the wide interest rate differential with the United States, where the Federal Reserve maintained a hawkish stance. This led to capital outflow pressures and reduced foreign investment inflows. In response, the authorities utilized a full toolkit: beyond the daily fixing, they employed strong verbal guidance, reduced foreign currency reserve requirements for banks, and made measured interventions in the offshore market (CNH) to squeeze short-sellers. The overarching goal was to avoid a volatile, disorderly depreciation that could trigger capital flight and destabilize financial markets.

By the year's end, the policy focus had subtly shifted. While guarding against sharp volatility remained paramount, there was a growing tolerance for a slightly weaker currency to aid export competitiveness, a critical growth lever as domestic consumption struggled. The RMB's value against a basket of trading-partner currencies (CFETS index) was allowed more flexibility, reflecting a dual objective: managing the dollar-pair for stability while using trade-weighted depreciation to provide modest economic support. Thus, 2023 concluded with the RMB having experienced controlled depreciation against the dollar, but within parameters firmly orchestrated by Chinese policymakers to serve broader macroeconomic stability goals.