Central Bank of China (PBOC) made an important decision to support the Chinese yuan, which has recently lost value. The bank announced that it would stop buying government bonds this month. The Central Bank stated that this decision was taken because the demand for bonds exceeded the supply.
The Fall in Bond Yields Puts a Challenge on the Chinese Yuan
Experts believe that the decision is due to the decline in bond yields and the chinese yuan stated that it reflected a concern about its impact on The yield on China’s 10-year government bonds fell below 1.6 percent earlier this week. According to TradingView data, this threshold corresponds to a 100 basis point decrease over the last 12 months.
On the other hand, the US 10-year bond yield increased to 4.7 percent, the highest level since November 2023. This increased the gap between US and Chinese bond yields, supporting the US dollar.
chinese yuancontinued to lose value against the US dollar and fell to 7.32. The decline marks the lowest performance in the last three months. Analysts, in addition to the developments in the Chinese bond market, Donald TrumpHe states that trade tariff concerns arising from the approach of ‘s inauguration date have increased the pressure on the Chinese yuan.
The Weakening of the Chinese Yuan Could Revitalize the Cryptocurrency Market
According to analysts, the weakening of the Chinese yuan could accelerate capital outflows. Some of the capital outflows cryptocurrency marketIt is expected to turn towards. This is especially Bitcoin (BTC) 
$94,821.2 It may increase demand for leading cryptocurrencies such as The upward trend in the cryptocurrency market may be supported by these developments.
Risks to China’s economy during the transition period continue to increase the pressure on the Chinese yuan. The decline in bond yields and the increase in the US-China bond gap may cause investors to turn to the US dollar and cryptocurrencies. On the other hand, the depreciation of the Chinese yuan may also have an impact on China’s role in global markets.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
