PBOC's Yi Gang: Yuan is stable, not an economic war device
|The People's Bank of China (PBoC) Governor Yi Gang delivered statements over the weekend addressing accusations of China using Yuan devaluation as a tool in the Sino-US trade war that continues to silently escalate in the background.
Yi Gang noted that the Yuan remains at a "reasonable equilibrium level" and is maintaining stability, while also admitting that yuan volatility is 'normal'. Yi commented that the Yuan's current exchange rate mechanism allows for two-way fluctuation, insinuating that the USD/CNY's current fluctuations are a result of movement in the US Dollar, and Gang concluded that the Yuan can be expected to remain within a "reasonable range" against the Greenback, which continues to appreciate. Gang topped his comments off by saying, "Economic growth, employment, inflation and the two-way fluctuation of the yuan are within reasonable range".
FXStreet's own Senior Analyst Joseph Trevisani noted that questions about China's currency manipulation are a moot point:
"Whether China is officially designated a currency manipulator by the Treasury Department is irrelevant. A glance at the yuan chart tells you all you need to know. Beijing's currency policy is an adjunct to its trade policy." - FXStreet's Joseph Trevisani
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