PBOC: Yuan FX rate isn’t a tool to combat commodity inflation – Bloomberg
|The People’s Bank of China (PBOC) clarified Thursday that the exchange rate adjustments cannot be used as a tool to boost exports or counter the impact of the rising inflation, driven by higher commodity prices.
Key quotes (via Bloomberg)
“The foreign exchange market is currently “balanced” and the yuan rate could go either way in the future.”
“The key is to properly manage expectations, firmly crackdown on attempts to manipulate the market or ‘maliciously’ create one-sided expectations.”
“Enterprises and financial institutions should adapt to a two-way fluctuation of the exchange rate.”
FX Implications
USD/CNY came under fresh selling pressure as the PBOC set the yuan reference rate this Friday, now flirting with daily lows of 6.3754, down 0.07% on the day.
The Chinese yuan is on the rise so far this week, having hit the highest since March 2016 at 6.3731 a day before.
Read: USD/CNH Price Analysis: Weekly falling channel, 50-HMA probe bounce off multi-month low
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