PBOC says China operates a market-based, managed floating exchange-rate regime guided by a basket of currencies. The regime lets market forces play the decisive role in rate formation while prioritizing prevention of large short-term swings—particularly rapid depreciation that could threaten financial stability. In specific scenarios, such as a sudden pandemic outbreak or major external shocks (for example a tariff war in April 2025), the PBOC may deploy macroprudential tools and expectation man

PBOC says China operates a market-based, managed floating exchange-rate regime guided by a basket of currencies. The regime lets market forces play the decisive role in rate formation while prioritizing prevention of large short-term swings—particularly rapid depreciation that could threaten financial stability. In specific scenarios, such as a sudden pandemic outbreak or major external shocks (for example a tariff war in April 2025), the PBOC may deploy macroprudential tools and expectation management and, in extreme cases, conduct direct foreign-exchange intervention to correct herd behaviour and self-reinforcing irrational depreciation expectations and prevent destructive short-term overshooting. The PBOC also said it will continue to enhance exchange-rate policy transparency.