Chinese devaluation resumes

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From Forexlive, it’s back on:

People’s Bank of China (PBOC) sets the USD/CNY mid-point reference rate at 6.4085

  • The bank sets the mid-point each day (Monday to Friday) and then allows the rate to fluctuate +/-2% either side of this central point.
  • USD/CNY moves outside the band are not permitted; the PBOC will intervene at the extremes to stop the rate moving any more than +/-2% on a day
  • The USD/CNY is not a free floating exchange rate

Yesterday the rate was set at a 4-year central point low (for the yuan) of 6.4043

  • Yesterday’s close was 6.4105

Down, down, currencies are down.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.