Figure 1

China’s currency falls below trend after 2022

China’s real effective exchange rate (REER) and trend, 1994–2026 (index, 2010 = 100)

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Notes: “Real” means inflation adjusted. “Effective” means an average across trading partners. The dot is an estimate for 2026 based on the January-September data and assuming no changes in the last three months of the year. The trend REER is based on a regression of REER on the trend value of China’s share in world PPP-adjusted GDP, which is defined in footnote 4.

Source: Bank for International Settlements, World Bank, and authors’ calculations.