The Chinese yuan rose to a 16-month high against the dollar on Wednesday, September 25, as new stimulus plans for the world's second-largest economy were unveiled.
The renminbi (the offshore yuan) rose to 6.9946 yuan per dollar, the highest level since May 2023. As for the onshore yuan, it recorded 7.0319 yuan per dollar, also the highest level since last May.
On the stock market front, it continued to rise on Wednesday, with Chinese stocks leading gains in Asian markets. China’s CSI 300 index rose by 2.1%, while Hong Kong’s Hang Seng index rose by 2%.
The People's Bank of China yesterday unveiled its biggest economic stimulus plan since the coronavirus pandemic, including a plan to cut reserve requirements and interest rates, in addition to supporting the ailing real estate sector.
Following this announcement, the bank today revealed a cut in the interest rate on medium-term loans (one year) worth 300 billion yuan ($42.66 billion) from 2.3% to 2%.
Earlier this week, the People's Bank of China cut the interest rate on seven-day reverse repo agreements to 1.7% from 1.8%.
In the Chinese bond market, the yield on 10-year bonds rose 5 basis points to 2.074%, while the yield on 30-year bonds rose to 2.182%.
Yields on 10-year and 30-year bonds rose to all-time highs after the central bank's disclosures on Tuesday.
