China finds equilibrium

From Shanghai Securities News via ForexLive:

• People’s Bank of China (PBOC) economist sees yuan close to equilibrium
• Ma Jun (chief economist of the PBOC’s research bureau)
• Says yuan is closer to its equilibrium level as China’s current account surplus normalizes and in the wake of this year’s depreciation
• Also says its difficult to judge exactly where the level is, but it’s certainly more in balance than it was five or seven years ago

Interestingly, interbank markets have also found relative calm in recent weeks:

Credit is stabilsing too even with shadow banking squeezed:

It looks like the PBOC&Co have got a handle of things nicely for now with structural adjustments underway in surplus sectors like property and steel, broadly decelerating credit and a 7% growth target in sight. The challenge ahead will be containing property deflation fallout.

It serves to underline that, exactly contrary to the expectations of Twiggy Forrest, Chinese success is now a bet against Australia.