FINANCE

Yuan Ends Year Strong, Snapping Three-Year Losing Streak

Published: Jan. 1, 2026 4:01 a.m. GMT+8

00:00

00:00/00:00

Listen to this article 1x

U.S. dollar and yuan currency symbols displayed in the window of a bank branch on Guangqu Road in Beijing. Photo: VCG

The Chinese yuan closed out 2025 with its strongest performance in over two years, breaching the key 7-per-dollar threshold and logging a 4.2% annual gain — its first in four years.

The onshore yuan ended the year at 6.9890 per U.S. dollar, buoyed by a softening greenback, renewed concerns over U.S. fiscal health, and unexpectedly resilient Chinese exports. The currency’s rebound marks a notable shift in sentiment after a multiyear slump fueled by China’s property market troubles and a yawning interest-rate gap with the U.S., which saw the yuan lose nearly 14% of its value from 2022 through 2024.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

The Chinese yuan gained 4.2% in 2025, closing the year below 7 per dollar for the first time since 2023, ending at 6.9890.
The rebound was supported by a weaker US dollar, resilient Chinese exports (over $1 trillion surplus in 11 months), and renewed confidence.
Analysts see potential further appreciation, though some caution that global volatility and domestic-external coordination remain important risks.

AI generated, for reference only

Who’s Who

China Securities Co. Ltd.: Zhou Junzhi, chief macro analyst at China Securities Co. Ltd., suggests that the yuan's previous decline was due to real estate crisis pessimism and weak domestic demand. However, she believes markets are now reassessing China's advantages as property-related issues lessen. Zhou anticipates further exchange rate adjustments as domestic consumption and investment rebalance.

China Minsheng Bank Corp. Ltd.: Wen Bin, the chief economist at China Minsheng Bank Corp. Ltd., commented on the increased end-of-year demand for settling foreign earnings into yuan. He suggests the data indicates that significant conversions have not yet fully occurred, implying further potential for the yuan to appreciate as exporters convert their holdings.

Huatai Securities Co. Ltd.: Yi Huan, the chief macro economist at Huatai Securities Co. Ltd., suggests that the yuan's revaluation could increase global interest in Chinese assets. This, in turn, could lead to a positive feedback loop of capital inflows into China.

BOC International (China) Co. Ltd.: Guan Tao, global chief economist at BOC International (China) Co. Ltd., cautioned against prematurely declaring a new currency cycle. Speaking at the China Wealth Management 50 Forum, Guan highlighted the need for better coordination between domestic policy and "external trade struggles" due to a volatile global environment.

AI generated, for reference only

What Happened When

From 2022 through 2024：: The yuan lost nearly 14% of its value due to property market troubles and a widening interest-rate gap with the U.S.

May 2023：: The yuan last finished below 7 per U.S. dollar before breaching it again in late 2025.

First 11 months of 2025：: China delivered a record trade surplus of more than $1 trillion.

December 2025：: Guan Tao spoke at the China Wealth Management 50 Forum, emphasizing calls for policy coordination amid a volatile global environment.

December 24, 2025：: The more freely traded offshore yuan first crossed below the 7 per dollar level.

December 31, 2025：: The offshore yuan hovered near 6.982 late in the day.

Final trading day of 2025：: The onshore yuan opened at 6.9923 per U.S. dollar and broke below 6.99 within the hour.

End of 2025：: The Chinese yuan closed out 2025 with a 4.2% annual gain against the dollar, its first in four years.

By 4:30 p.m. local time, January 1, 2026：: The onshore yuan ended the session 11 pips stronger than the previous day’s close, marking its first close below 7 since May 2023.

AI generated, for reference only