PBOC senior advisor says yuan decline is driven by market expectations

PBOC senior advisor Sheng Songcheng writes in an article on Sina.com

• Yuan decline versus the dollar is a normal market reaction to fundamentals
• Don't read too much into the decline
• The market shouldn't assume PBOC is guiding the yuan weaker
• No need to be pessimistic over Chinese economy
• PBOC still maintains prudent, neutral monetary policy

Without any clues on how the central bank devises its yuan fixing mechanism, it's easy to argue in such a manner. But even so, you have to say a more than 3% decline in the yuan against the dollar in the span of two weeks is hard to justify by those means alone.

Well, whatever works for them I guess.