How China Is Defending the Yuan Without Burning Reserves

China Economy with Fexingo: Beijing's Policies, Trade, and Asia-Pacific Markets · Jul 27, 2026 · 7m · transcript

The yuan has held steady at 6.78 per dollar for weeks even as the U.S. dollar index climbed to 120.5 and China's trade deficit widened to $77.6 billion in May. How is Beijing managing this stability without draining its foreign reserves? In this episode, Lucas and Luna examine the PBOC's toolkit: state bank interventions, tighter capital controls, and yuan swap lines with emerging economies. They also discuss why China is prioritizing currency stability over export competitiveness, contrasting with Japan's approach. With the current account deficit deepening and imports…