# China’s central bank is stuck in a policy dilemma

> The yuan has weakened more than 10% against the dollar since the Federal Reserve began raising rates in March 2022 and is trading close to its weakest level against the greenback since 2007. The article frames the PBOC as caught between defending the currency and supporting a struggling economy.

- Date: 2024-07-09 · published 2024-07-09T12:00:00.000Z
- Category: macro · region China · magnitude low
- Page: https://feedsoft.ai/events/12299-china-s-central-bank-is-stuck-in-a-policy-dilemma
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md), [Soybeans](https://feedsoft.ai/c/SOY.md)

## Why it matters

A persistently weak yuan raises the cost of imported feed inputs for China and can slow purchases of US and Brazilian soybeans and meal. The policy bind limits Beijing's ability to stimulate demand, a mildly bearish factor for feed commodities.

## Read by commodity

- SOY: bearish ▼
- USDCNY: bullish ▲

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDCNY | 2019-08-05 | [China's central bank denies devaluation is to counter tariffs](https://feedsoft.ai/events/5375-china-s-central-bank-denies-devaluation-is-to-counter-tariffs.md) | +1.8% | +3.1% |
| USDCNY | 2024-01-24 | [Instant view: China central bank acts to support markets, economy](https://feedsoft.ai/events/32356-instant-view-china-central-bank-acts-to-support-markets-economy.md) | +0.0% | +0.2% |
| USDCNY | 2024-06-28 | [China’s central bank puts the yuan’s exchange-rate swings in crosshairs \| South China Morning Post](https://feedsoft.ai/events/30006-china-s-central-bank-puts-the-yuan-s-exchange-rate-swings-in-crosshairs-south.md) | -0.0% | -0.3% |
| USDCNY | 2018-01-11 | [One way or another: China's yuan policy tweak a warning shot in old battle](https://feedsoft.ai/events/67196-one-way-or-another-china-s-yuan-policy-tweak-a-warning-shot-in-old-battle.md) | -1.4% | -2.8% |
| USDCNY | 2024-07-25 | [China central bank surprises by lending again at lower rates \| Reuters](https://feedsoft.ai/events/7521-china-central-bank-surprises-by-lending-again-at-lower-rates-reuters.md) | -0.6% | -1.8% |
| SOY | 2024-05-23 | [China Allows Yuan to Drop as Outflows, Dollar Test Central Bank’s Grip - Caixin Global](https://feedsoft.ai/events/30490-china-allows-yuan-to-drop-as-outflows-dollar-test-central-bank-s-grip-caixin.md) | -2.9% | -6.9% |
| SOY | 2019-06-11 | [Why ‘cracking seven’ is a big deal for China’s currency](https://feedsoft.ai/events/58820-why-cracking-seven-is-a-big-deal-for-china-s-currency.md) | +6.3% | +2.8% |
| SOY | 2019-06-09 | [China Central Banker Says No Specific Yuan Level Important - Bloomberg](https://feedsoft.ai/events/58817-china-central-banker-says-no-specific-yuan-level-important-bloomberg.md) | +4.7% | +2.2% |

## Sources

- reuters.com: https://www.reuters.com/breakingviews/chinas-central-bank-is-stuck-policy-dilemma-2024-07-09/

---
Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.