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Free AccessMNI China Daily Summary: Wednesday, Aug 21
MNI BRIEF: China Aluminium Imports To Increase In 2024
MNI EXCLUSIVE: Dovish Fed To Bolster EM FX, PBOC's Ma Jun Says
--Yuan To Rally Against Weak Dollar In Short Term: Former SAFE Official
BEIJING (MNI) - The increasingly dovish Federal Reserve will bolster
emerging market currencies, a member of the People's Bank of China's monetary
policy committee told MNI, and a former senior foreign exchange official said
the yuan would rally and the PBOC have more scope to boost China's economy.
"I think the Fed's stance of slowing the pace of rate hikes will help ease
the pressure of capital outflow from emerging markets and improve market
confidence in the stability of their currencies," MPC member Ma Jun said.
Separately, Guan Tao, former Director General of Balance of Payments at the
State Administration of Foreign Exchange, told MNI: "The dovish stance of Fed
monetary policy will help expand the PBOC's policy room and the yuan will see
further strength as the dollar falls in the short term."
The Fed signalled on Thursday that it was unlikely to raise interest rates
this year over growth concerns and that it would stop running down its balance
sheet in September.
The yuan rose sharply on Thursday. USDCNY touched 6.6689 during intraday
trade, the lowest since July 13, 2018, when it reached 6.6449. It closed 121
pips lower at 6.6877 at 4:30 pm Beijing time, compared with Wednesday's official
close of 6.6998.
The PBOC set daily fixing at 6.6850 this morning, the lowest since last
July, and compared with 6.7101 Wednesday.
Zhao Qingming, chief economist at China Financial Futures Exchange, said
the yuan will face appreciation pressure against the greenback, but the dollar
index may go up again in the first half of the year, due to and weak
fundamentals in Europe weighing on the euro.
"I predict the yuan will be volatile, in a range of 6.30 to 6.99 this
year," Zhao noted.
Asked if the PBOC would further ease policy, Wu Ge, a former official at
the central bank's monetary policy division, told MNI that easing is expected to
continue for now as the economy still faces downside pressure, but that its
extent would depend on the performance of economic indicators, which are likely
to show stabilisation in the second half of the year.
--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com
--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com
[TOPICS: MAQDS$,MMQPB$,M$A$$$,M$Q$$$,MT$$$$,MX$$$$,MGQ$$$]
To read the full story
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Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.