USD/CNY hovers around the 6.95 level. Economists at ANZ Bank expect the pair to edge lower next year towards 6.65.

Recovery in China’s growth reduces the need for further PBoC’s easing

“Although it will be a bumpy road ahead as China reopens, at least the shift in the narrative from overwhelmingly negative in 2022 towards a more hopeful tone for 2023 will help prompt inflows and encourage exporters’ conversion of accumulated dollar receipts. A recovery in China’s growth reduces the need for further People’s Bank of China easing as well.” 

“We do not foresee a rapid rebound in outbound Chinese tourists at first due to an anticipated backlog in passport applications. This should allay any concerns over potential outflows.”

“We forecast a rebound in the CNY to 6.65 against USD by the end of 2023.”