PBOC's Yi Gang: Yuan is stable, not an economic war device

Joshua Gibson FXStreet

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

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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