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CIBC See PBOC Move as Small But Symbolic

CHINA

In their quick take of the PBoC's decision to hike the FX reserve requirement ratio by 2ppts, CIBC write that:

  • It's a small move, but defined by its symbolism as it flags some degree of discomfort from the PBoC with recent moves in USD/CNY.
  • At this point, they wouldn't equate this to the infamous 2015 devaluation. This appears to be more management of inward capital flow.
  • The 2015 episode was shocking because it ran counter to market-oriented reforms that leadership had pledged to pursue on the exchange rate. Nonetheless, keep an eye on how markets digest this news in the coming sessions.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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