China Securities Journal editorial via ForexLive:
- Recent yuan depreciation will provide a cushion and leave room for future increases should China face intensive capital inflows again if both Europe and Japan expand their quantitative easing programs.
- Said the Chinese economy can’t cope with any more sharp appreciation because of weak exports so depreciation provides a cushion for possible inflows, noting signs that funds are already returning to emerging market economies and a rebound in China’s foreign exchange purchase number in March.
The PBOC fixing for the yuan yesterday was the weakest in 18 months and the currency has erased all its gains since late 2012:
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The PBOC is also draining liquidity again today for a net 2bn yuan drop on the week after a net 41 billion yuan drain last week. SHIBOR has tightened slightly but remains loose:
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