China's central bank started lowering the national currency exchange rate in late April amid a new COVID-19 outbreak in Beijing and the ongoing lockdown in Shanghai, which resulted in disruptions in production and logistics chains.
Last Thursday, the average exchange rate of the yuan against the US dollar jumped by 505 basis points; however, the very next day, it dropped by 660 basis points. The decline continued on Monday and Tuesday, with the currency falling by another 567 and 235 basis points, respectively.
On 5 March, the Chinese authorities announced their intention to maintain a stable yuan exchange rate in 2022 and to implement a prudent monetary policy with a view to preventing financial risks and supporting economic growth.