In the South China Morning Post over the weekend, citing Premier Li Keqiang
- China has changed its long-standing rhetoric on its yuan policy
- Signalling Beijing may alter its course on exchange rates this year under pressure from US Federal Reserve rate rises and US President Donald Trump's threats of a trade war
- For the first time in an annual government report, the central government included the requirement to ensure the stable global status of the yuan as one of its major tasks, dropping the line "keeping a stable yuan at a reasonable and balanced level" that has been including in report for the past three years.
- "The renminbi exchange rate will be further liberalised, and the currency's stable position in the global monetary system will be maintained," according to the government work report read out by Premier Li Keqiang at the National People's Congress on Sunday.
Boldings are mine.
it seems to be signalling further exchange rate liberalisation. Doing so might give the authorities scope to lessen their intervention in the yuan forex market. Supporting the yuan has (not letting it drop to fast) has had a cost in foreign currency reserves, as has combating capital flight.
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Over the weekend news from China:
- Li says China cutting 2017 GDP target to around 6.5%
- China to cut 2017 steel capacity by 50mln tonnes
Recaps:
