The RMB exchange rate experienced notable volatility on July 24, 2026, with the central parity rate set at 6.7939 against the USD, up 33 pips from the previous trading day, marking the largest single-day depreciation since June 18. For textile exporters, this shift is more than a number—it directly impacts settlement gains and profit margins on orders.
Dual Pressure from Exchange Rate Volatility and Liquidity Tightening
On the same day, the People's Bank of China (PBOC) conducted 89 billion yuan in 7-day reverse repos and 500 billion yuan in 1-year MLF operations, while 450.5 billion yuan in reverse repos matured. For the week, net withdrawal reached 843 billion yuan, signaling clear liquidity tightening. The reverse repo rate remained unchanged at 1.40%, but the scale of net withdrawal hit a recent high, indicating a balance between growth support and risk prevention.
For textile foreign trade firms, a weaker RMB theoretically boosts export competitiveness—more yuan for each dollar earned. However, the actual impact depends on the timing between order signing and settlement. If firms locked in forward exchange rates or fixed RMB prices before the depreciation, they cannot benefit; conversely, those holding USD receivables gain extra income upon settlement.
Industry Cluster Reactions: Keqiao, Shengze, Nantong Face Cost Pass-Through
The effect of RMB depreciation is uneven across the textile supply chain. In Keqiao, a major chemical fiber fabric hub, export orders are mostly dollar-denominated, directly boosting RMB revenue. But imported raw materials like PTA and MEG become costlier. Shengze's weaving mills face a more complex picture: export margins improve for grey fabrics, but imported dyes and chemicals add costs.
Nantong's home textile cluster, focusing on bedding and towels, typically has order cycles of 30-60 days. The July 24 rate change will directly impact settlement in August-September. If the depreciation trend continues, exporters may delay settlement for higher returns, but must bear the risk of reversal.
Historical Reference and Future Outlook
Since June 18, this 33-pip depreciation is not extreme, but combined with PBOC's net withdrawal, market expectations of further near-term weakness have risen. Sourcing managers should watch: if depreciation persists, imported chemical fiber raw materials (e.g., polyester staple fiber, viscose) will face upward price pressure, and domestic yarn and fabric costs may adjust early.
On the order side, overseas buyers often demand longer payment terms or lower quotes during RMB depreciation cycles. Exporters should include exchange rate adjustment clauses in contracts or settle in RMB to lock in margins.