Eyes on the USD/CNY reference rate setting after yesterday's PBOC yuan
Yesterday a PBOC Dep Gov said 2-way fluctuation of the yuan will become a new normal
The comments followed a bot more of a muddled message from the boss, PBOC Gov Yi Gang when he hinted that the PBOC may loosen its control over the exchange rate of the yuan:
- improve market-based floating exchange rate mechanism with reference to basket currencies
Then vowed further intervention anyway:
- will keep yuan exchange rate basically stable at reasonable levels
I doubt we'll see the PBOC fully relax yuan controls at the mid rate today! But, going ahead the message seemed to indicate more freedom for the rate. We'll see...