PBOC says it is able to keep the yuan stable at a reasonable balanced level
The People's Bank of China slashed the onshore yuan to its weakest mid rate of the year today.
And now with the stable reasonable balanced comment?
Watch what they do folks, not what they say. The PBOC would not want want expectations for a weakening yuan to take hold, it would encourage capital floight which they don't want. hence the comments.
- says can keep yuan absolutely stable
- says depreciation of yuan due to trade protectionism, tariffs on Chinese goods
- says fluctuation in yuan is normal
- says foreign exchange market can find its balance on its own
- says it has confidence in its ability to maintain yuan's exchange rate at a reasonable level
- PBOC will crack down on short-term speculation on the yuan
- will encourage enterprises to purchase hedging products to avoid exchange rate risks
- suggests investors not put too much attention on speculation in the foreign exchange market
- says normal for yuan to fluctuate in both directions