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fxJun 12, 2026, 5:16 PM

Societe Generale: Policy Mix Supports Yuan Amid Subdued Inflation

Societe Generale notes that China's May CPI at 1.2% and core at 1.1% indicate weak consumer demand, while PPI hit a four-year high, yet a supportive policy mix is expected to stabilize the yuan.

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Societe Generale has weighed in on the Chinese yuan, stating that a combination of policy measures should help maintain its stability. The bank highlights that China's inflation remains subdued, with the May Consumer Price Index (CPI) coming in at 1.2% and core CPI at 1.1%, pointing to tepid consumer demand.

At the same time, Producer Price Index (PPI) has climbed to a four-year high, suggesting rising input costs and margin pressure for producers. Despite these contrasting signals, Societe Generale believes the current policy mix is adequate to support the yuan and prevent excessive volatility.

Source: FXStreet Forex News