Renewed in 2024: Chinese Yuan Falls by 2068 Points Against US Dollar, Decreasing by 2.9%

In 2024, the Chinese yuan depreciated against the US dollar by 2068 basis points, a decrease of 2.9%, marking the third consecutive year of depreciation for the yuan.

On December 31, 2024, the last trading day of the year, the yuan to US dollar spot exchange rate closed at 7.2988 at 4:30 p.m. Beijing time, showing a 4 basis point increase from the previous trading day.

According to a report from the Hong Kong “Sing Tao Daily” on December 31, some foreign exchange traders indicated that on the last trading day of 2024, the US dollar remained at a two-year high, with expectations of President Trump potentially imposing tariffs soon still present. The yuan lacked significant rebound momentum, and from the midpoint perspective, regulators seemed reluctant to abandon the defense around the 7.3 level.

On December 31, the official representative of the Chinese Communist Party, the yuan midpoint, was reported at 7.1884, a 5-point increase from the previous day’s 7.1889, reaching a near one-week high.

Looking at the overall trend of the Chinese yuan against the US dollar in 2024, the yuan to US dollar exchange rate dropped from 7.0920 to 7.2988, a decrease of 2068 basis points. From the midpoint perspective, the yuan to US dollar midpoint in 2024 decreased from 7.0827 to 7.1884, accumulating a total decrease of 1057 basis points for the year, resulting in an annual depreciation of 1.49%.

In 2024, the Chinese yuan exchange rate experienced a process of depreciation, rapid appreciation, and then depreciation again.

In the first half of the year, amid a strong US dollar and widening China-US interest rate differentials, the Chinese yuan faced significant depreciation pressure, resulting in a 2.45% drop in the yuan to US dollar spot exchange rate. Moving into the second half of the year, the volatility of the yuan to US dollar exchange rate increased. From late July to late September, influenced by a weakening US dollar and a strengthening Japanese yen, the yuan exchange rate saw a substantial increase. By the end of September, the yuan exchange rate even surpassed the “7” mark in the offshore market. Moving into the fourth quarter, with the US dollar index regaining strength, the yuan exchange rate once again came under pressure, approaching the 7.3 level.

On December 31, Caixin Financial website stated that the market’s expectation for yuan depreciation remains strong. Huaxi Securities’ research report believes that the most significant uncertainty affecting the yuan exchange rate trend in 2025 remains President Trump’s tariff policy intensity and implementation pace, with expectations that the US dollar is likely to remain strong in 2025, leading to a moderate depreciation of the yuan against the dollar.

Huatai Securities’ research report also emphasized that the key factor determining the exchange rate trend lies in policy decisions.

Many netizens are not optimistic about the yuan to US dollar trend in 2025.

Internet user “Into the Deep Sea” commented: “7.5 is not just a dream!”

Tencent user 9527 stated: “It will break 8 sooner or later, just look at the A-share market.”

Netizen “Love Life” believes that the depreciation of the yuan against the US dollar in 2024 is far higher than 2.9%, stating: “When considering the US dollar interest rate differential, the actual depreciation of the yuan is 8%.”