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MNI: PBOC Response May Be Needed As Yuan Breaches 7 - Analysts

MNI (Singapore)

The Bank has ample tools to slow any sharp slide in the currency, which analysts forecast may fall as low as 7.2 against the U.S. dollar.

True

The People’s Bank of China could officially reintroduce the counter-cyclical factor into its yuan pricing model as one tool to slow any sharp slide in the currency after it breached 7 against the U.S. dollar for the first time since mid-2020 despite recent efforts to stem the selling momentum.

The PBOC has plenty of tools to curb “abnormal” volatility in the yuan should it diverge too much from the rising U.S. Dollar Index (See: MNI: PBOC Has Tools To Slow Yuan Slide – Analysts), said Wang Qing, chief macroeconomic researcher at Golden Credit Rating.

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The People’s Bank of China could officially reintroduce the counter-cyclical factor into its yuan pricing model as one tool to slow any sharp slide in the currency after it breached 7 against the U.S. dollar for the first time since mid-2020 despite recent efforts to stem the selling momentum.

The PBOC has plenty of tools to curb “abnormal” volatility in the yuan should it diverge too much from the rising U.S. Dollar Index (See: MNI: PBOC Has Tools To Slow Yuan Slide – Analysts), said Wang Qing, chief macroeconomic researcher at Golden Credit Rating.

Keep reading...Show less