Searcher

Published on Friday, August 9, 2019 | Updated on Friday, August 9, 2019

China | RMB depreciation: this time is different

The recent sharp depreciation of the RMB is unlikely to lead to financial turmoil like in 2015: the authorities kept the currency’s pricing mechanism intact and have accumulated valuable experience over the past few years; moreover, the PBoC still maintain a tight grip of the country’s capital account.

Key points

  • Key points:
  • The CNYUSD fell past the important psychological level of 7 for the first time since 2008.
  • The sharp depreciation came amid the renewed escalation of the China-US trade war after the US President Trump threatened to impose a 10% punitive tariff on the remaining China’s exports of USD 300 billion.
  • We argue that the recent sharp depreciation of the RMB is unlikely to lead to financial turmoil like in 2015.
  • the authorities kept the currency’s pricing mechanism intact and have accumulated valuable experience over the past few years;
  • Moreover, the PBoC still maintain a tight grip of the country’s capital account.

Geographies

Has this information been useful?

New comment

Be the first one to add a comment

Load more

You may also be interested in