13 Aug 2015
Impasse in the Yuan devaluation? – Deutsche Bank
FXStreet (Edinburgh) - Jim Reid, Analyst at Deutsche Bank, evaluates the recent events in the Chinese economy.
Key Quotes
“We’ve also heard from the PBoC this morning after the Central Bank held a press conference to address the recent events”.
“Vice-Governor Yi Gang said that the PBoC will continue to step in when the market is ‘distorted’, that there is no economic basis for the Yuan to fall continuously and that it will look to keep the exchange rate ‘basically stable’.
“The Vice-Governor also said that the PBoC will closely monitor cross-border capital flows and that reports suggesting the Central Banks wants to see the currency depreciate 10% are ‘groundless’.
“The market and trading partners are still trying to assess the motive for this week's move and how far they're likely to allow the currency to fall”.
“These comments may give some comfort but it does feel there's a lot more to come on this story over the weeks ahead”.
Key Quotes
“We’ve also heard from the PBoC this morning after the Central Bank held a press conference to address the recent events”.
“Vice-Governor Yi Gang said that the PBoC will continue to step in when the market is ‘distorted’, that there is no economic basis for the Yuan to fall continuously and that it will look to keep the exchange rate ‘basically stable’.
“The Vice-Governor also said that the PBoC will closely monitor cross-border capital flows and that reports suggesting the Central Banks wants to see the currency depreciate 10% are ‘groundless’.
“The market and trading partners are still trying to assess the motive for this week's move and how far they're likely to allow the currency to fall”.
“These comments may give some comfort but it does feel there's a lot more to come on this story over the weeks ahead”.