While both the U.S. Federal Reserve and the Bank of England raised interest rates by 75 basis points, the Central Bank of China decided to maintain its relatively lax monetary policy compared with Western economies. But the country’s national currency, the yuan, fell 0.4% to 7.316, near the 15-year low of 7.33 reached Tuesday; Business Insider wrote. But this had a positive effect on Chinese yuan stability. 

According to Central Bank of China Governor Yi Gang, China’s normal monetary policy will strengthen the yuan on the global stage, while helping to boost the country’s income: 

“The yuan exchange rate will remain largely stable at a reasonable and balanced level, and the value and purchasing power of the yuan will also remain stable.”

On the one hand, the yuan shows a strong position against other world currencies. But at the same time, it has fallen significantly against the dollar in 2022. The Chinese stock market and bond market are characterized by active sales and capital outflows. Assets which were denominated in yuan are also being withdrawn from China. Against the background of what is happening, the national Chinese currency looks less attractive.

Earlier we mentioned that the USD weakened against most currencies after the growth following the Fed meeting results.