The Chinese yuan extended its decline for a third consecutive session on Tuesday, hitting a one-week low against the U.S. dollar. The currency’s weakness followed the People’s Bank of China’s decision to cut interest rates for the first time this year, a move aimed at supporting the economy amid growing external pressures.
The rate cut comes as Chinese policymakers seek to counterbalance the economic impact of U.S. tariffs and slowing domestic demand. Market participants had largely anticipated the monetary easing, which reflects Beijing’s growing concerns about economic headwinds both at home and abroad.
Analysts note the yuan’s depreciation could continue in the near term as China maintains its accommodative policy stance. However, the central bank is expected to keep the currency’s movements within a managed range to prevent excessive volatility that could trigger capital outflows. The focus now shifts to upcoming economic data that will show whether these stimulus measures are gaining traction.
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