China’s yuan posts second straight year of gains against US dollar, best performing in emerging markets

The Chinese currency gained 2.44 per cent against a rising US dollar this year to become the best performing emerging market currency

With many market participants already on their end of year holidays, trading was quiet and tepid on the last day of the year, traders said

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The Chinese currency gained 2.44 per cent against a rising US dollar this year to become the best performing emerging market currency. Photo: Reuters

Published: 6:45pm, 31 Dec 2021

China’s yuan was largely flat against the US dollar in holiday-thinned trade on Friday but still posted its second straight year of gains in 2021.

The Chinese currency gained 2.44 per cent against a rising US dollar this year to become the best performing emerging market currency, underpinned by robust exports, a growing trade surplus, steady capital inflows into Chinese assets and ample dollar liquidity onshore.

A lower yuan exchange rate figure means it takes fewer yuan to purchase one US dollar, indicating a stronger Chinese currency.

The yuan’s trade-weighted value against major trading partners also rose to six-year highs and gained 8.05 per cent for the year.

Before the market opening, the People’s Bank of China (PBOC) set the midpoint rate at 6.3757 per US dollar, 0.13 per cent weaker than the previous fix of 6.3674. It finished the day at 6.3730.

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