PBOC Pushes Back on Yuan Undervaluation Claims Points to Decades of Appreciation and Structural Trade Shifts
China’s central bank has firmly rejected international claims that the yuan is artificially undervalued, publishing a detailed policy defence on October 8, 2026. The Express Tribune
The People’s Bank of China (PBOC) stated it has “no need, nor any intention, to seek trade competitive advantage through currency depreciation.” The bank pointed to the yuan’s cumulative 23% gain against the US dollar since the 2005 exchange rate reform, a more than 50% rise in its nominal effective exchange rate, and a 35% increase in its real effective rate; all based on Bank for International Settlements data.
The PBOC also challenged the logic underpinning the undervaluation argument, noting that China’s export market share actually grew during periods of yuan appreciation, and fell during depreciation cycles. It further highlighted that surplus economies such as Japan, Switzerland, and Germany have all seen their currencies weaken without triggering equivalent accusations.
China’s current account surplus has fallen sharply from its 9.9% of GDP peak in 2007. The PBOC pledged continued market-oriented reform, expanded domestic consumption, and enhanced IMF transparency reporting from 2027.
The statement signals Beijing’s intent to defend its currency policy in both technical and diplomatic terms ahead of trade negotiations expected in late 2026.
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