Various Chinese state media agencies are coming to the rescue of the local currency, the yuan, after the recent depreciation, justifying that the country’s strong exports should offset a stronger dollar and hawkish Fed rate hikes, per Reuters.

The official Shanghai Securities News said, citing analysts, “China’s robust trade surplus should continue to provide support as exporters’ conversion of their FX receipts would be an important factor stabilizing the exchange rate.”

“A moderate yuan depreciation is conducive to maintaining export competitiveness against the backdrop of the global economic downturn, and has positive implications for keeping the economy running in a reasonable range,” Securities Times noted.

At the time of writing, USD/CNY is adding 0.42% on the day, trading at 6.8636. The pair hit the highest level since August 2020 at 6.8676, earlier in the day.  The yuan has lost more than 1.6% against the greenback since the People’s Bank of China (PBOC) surprised the market by lowering two key interest rates in the past week, which widened the monetary policy divergence with the Fed.