It's a mystery to me why the People's Bank of China would be referring to a panic sell in yuan, and yet here we are:
It's a surprising remark, intended to calm fears over further rapid selling of the RMB and stabilize the currency. For today CNH has been showing signs of holding around current levels.
A response from Mizuho Bank in Hong Kong agrees:
- “The state media commentary is intended to shore up investor confidence on yuan exchange rate and the depreciation trend will remain in control given a basket of policy tools to stabilize yuan if necessary,”
- “The strengthened fix indicates that the PBOC is still in alert mode to defend the currency.”
Still, I wouldn't have chosen 'panic' in my message to the market.
USD/CNH update:
