Offshore Yuan Holds Gains as Policy Support Builds

The offshore yuan held its recent gains to around 7.19 per dollar on Monday, after the People’s Bank of China announced the formation of a new macroprudential and financial stability committee. The central bank reaffirmed its accommodative stance, pledging to manage key financial risks and maintain ample liquidity in H2 through “appropriately loose” monetary policy. Lending to strategic sectors like tech and green development has surged, reflecting policy priorities. Meanwhile, investors are eyeing October’s key political plenum, where officials are expected to unveil responses to persistent deflationary pressure, overcapacity, and the ongoing property downturn. Recent Politburo signals point to increased stimulus via bond issuance and demand-side measures. A near-term boost also came as exporters front-loaded orders under the temporary US tariff truce. Markets now turn to the upcoming private services PMI, key trade and inflation releases for fresh insight into the economic outlook.