As the yuan exchange rate tiptoed toward and then passed the strong side of 7-per-dollar last year, foreign currency flows into Chinese banks hit a record $452 billion in December. Last month, central bank Deputy Governor Zou Lan said the yuan is expected to experience two-way fluctuations while maintaining flexibility. "This might suggest a higher two-way volatility in the exchange rate," he said, which he thinks is likely to fluctuate in a range around 7-per-dollar. Ding, a Shanghai-based electrical industry exporter who only provided his surname, said his firm was already converting more dollars to yuan more quickly because of recent exchange rate moves. "We expect the level of surplus to go beyond $1 trillion again in 2026," said Kelvin Lam, senior China+ economist at Pantheon Macroeconomics, who expects the exchange rate to be at 6.85 at the end of the year.

Source: The Edge Markets February 04, 2026 02:16 UTC