China's Central Bank States No Intention to Gain Trade Advantage Through Devaluation

The People's Bank of China issued a statement on its policy stance regarding the renminbi exchange rate, clarifying that the renminbi exchange rate system is a managed floating exchange rate system based on market supply and demand, and adjusted with reference to a basket of currencies. Since 2017, it has exited from regular foreign exchange interventions. The central bank stated that China has no intention of gaining a competitive advantage in trade through devaluation and has never engaged in competitive currency devaluation. It only employs macro-prudential tools to prevent short-term overshooting under significant external shocks such as the pandemic and the tariff war in April 2025. Since the exchange rate reform in 2005, the renminbi has appreciated by a cumulative 23% against the US dollar, with a nominal effective exchange rate appreciation of over 50%; since 2025, it has appreciated approximately 9% against the US dollar. The central bank pointed out that it considers the IMF's External Balance Assessment (EBA) conclusions as evidence of the renminbi being undervalued.

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