ICYMI - PBOC (verbal) intervention in CNY and a cut to FX RR

The People's Bank of China is not immune to the failings of central banks:

• Central bank groupthink is an ongoing disaster

Groupthink is arguably even more insidious in a one-party state like China, where opposing the party line could earn you a visit from the extensive and pervasive state security apparatus. And even worse when you get carted away.

The latest from the PBOC is in trying to deal with yuan weakness, which they oppose due to their fears of capital outflow, with some overnight jawboning trying to support the currency:

• PBOC deputy governor: Don't bet on one-way moves in the yuan

And a cut to the FX RR:

• PBOC cuts FX reserve ratio by 200 bps to restrain yuan weakness

I posted, over and over, last week that the PBOC were resisting yuan weakness, this for example:

• The PBoC yuan setting is due soon - once again the Bank is battling

China's economy is being pummeled by ongoing lockdowns, this the latest via AFP:

• China has locked down 65 million of its citizens under tough COVID-19 restrictions and is discouraging domestic travel during upcoming national holidays.

Also by power shortages, and the deeply troubled contracting property sector.

Its pretty dark right now, but maybe the darkest hour is right before the dawn. For the good people of China putting up with all this and inept leadership, let's hope so.

-

This guy is seeking a third term, and he'll get it despite his repeated failures.

---

eur EUR The euro (EUR) is the official currency of the European Union (EU) and 19 of 27 member states at the time of writing. It is the second most-traded currency worldwide in forex markets after the US dollar.The euro was originally introduced back on January 1, 1999, having replaced the European Currency Unit. Banknotes and physical euro coins subsequently entered circulation only in 2002.Upon its adoption, the euro replaced domestic currencies in participating EU member states. The rise in its value The euro (EUR) is the official currency of the European Union (EU) and 19 of 27 member states at the time of writing. It is the second most-traded currency worldwide in forex markets after the US dollar.The euro was originally introduced back on January 1, 1999, having replaced the European Currency Unit. Banknotes and physical euro coins subsequently entered circulation only in 2002.Upon its adoption, the euro replaced domestic currencies in participating EU member states. The rise in its value Read this Term