Part 4/11:
However, it’s important to recognize that the loss of faith isn’t exclusive to China; the US dollar has also suffered weakened confidence over the years. Since January, the dollar has depreciated by nearly 6% against a basket of currencies, indicating a broader trend of shifting trust in major reserve currencies.
The Quiet Power of the People's Bank of China
Unlike previous strategies that might involve overt policy announcements, the PBOC has employed what it calls "window guidance"—a subtle yet potent form of influence. By instructing state-owned banks to reduce dollar purchases and scrutinize client transactions, China aims to curb speculative trading, stabilize the yuan, and prevent panic from taking hold.