What is holding up the yuan?

Friday, 21 January 2022

The attitude in markets is all one-way:

China’s central bank set its strongest reference rate for the yuan in three years in a sign it’s loosening its grip on the currency amid a relentless rally.

The People’s Bank of China set the reference rate at 6.3485 per dollar, the strongest since May 2018, similar to the average estimate in a Bloomberg survey. The move came after the dollar fell for two straight days, and indicated that the central bank is allowing the market to drive the yuan.

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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.