The offshore yuan inched higher to around 6.77 per US dollar on Thursday, as expanding liquidity in Hong Kong underscored progress in China's push to internationalize its currency. Offshore yuan deposits in the city climbed to a record 1.13 trillion yuan at the end of May, while yuan clearing volume rose to 53.2 trillion yuan in June, exceeding settlement volumes in both the Hong Kong dollar and the US dollar.
Robust demand for yuan financing—supported by China’s relatively lower interest rates—has driven growth in offshore yuan lending, bond issuance, and hedging activity. Earlier this year, President Xi Jinping reaffirmed the internationalization of the yuan as a strategic priority, seeking to strengthen the currency’s global standing and reduce dependence on the US dollar.
Investors are now looking ahead to the upcoming Politburo meeting later this month for signals on Beijing’s policy agenda for the second half of the year, with any new stimulus measures likely to shape the yuan’s outlook.
