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MNI BRIEF: PBOC Faces Test As Yuan Breaks 7.2

MNI (Singapore)
MNI (Singapore)

The People's Bank of China could reintroduce its counter-cyclical factor but it's too soon to see it intervene directly in the market, analysts said.

True

The People's Bank of China is expected to step up efforts to curb the weakening yuan as it broke through 7.2 against the U.S dollar, even as a hike in the forex risk reserve requirement takes effect today and as reports claim the Bank is set to reintroduce its counter-cyclical factor.

The yuan fell to its weakest since the 2008 financial crisis, with both CNY and CNH falling 400 pips to 7.2292 and 7.2224 respectively. The PBOC set its yuan daily fixing at 7.1107 on Wednesday, the highest since early June 2020, and the 25th consecutive higher-than-expected daily fixing, according to a Bloomberg survey.

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The People's Bank of China is expected to step up efforts to curb the weakening yuan as it broke through 7.2 against the U.S dollar, even as a hike in the forex risk reserve requirement takes effect today and as reports claim the Bank is set to reintroduce its counter-cyclical factor.

The yuan fell to its weakest since the 2008 financial crisis, with both CNY and CNH falling 400 pips to 7.2292 and 7.2224 respectively. The PBOC set its yuan daily fixing at 7.1107 on Wednesday, the highest since early June 2020, and the 25th consecutive higher-than-expected daily fixing, according to a Bloomberg survey.

Keep reading...Show less