Yuan Will Depreciate If Dollar Rises

21st CBH: 央行官员打“强心针” 人民币即期抑颓势

March 4, Yi Gang said that a country's exchange rate for one very important barometer of the country's overall economic and financial situation, although China's economy has entered a three superimposed under the new normal, but the Chinese economy is still stable, practical yuan exchange rate is still stronger. "We have noticed a decline in recent days parity, but this should not be the central bank intends to guide the exchange rate depreciation, more to respond to the dollar on the international market, no special worry. If the sharp decline in the exchange rate, while lower interest rates This may lead to unnecessary panic, the monetary authorities should avoid this situation. "Liu Dongliang on the" Daily Economic News "reporter said.

Liu Dongliang is an analyst at China Merchants Bank.

Earlier in the week: PBOC’s Growth Focus Seen Delaying Yuan Trading Band Changes

“It’s not a good time to widen the trading range when there’s relatively great depreciation pressure for the yuan,” said Liu Dongliang, a Shanghai-based analyst at China Merchants Bank Co., the nation’s sixth-largest lender. “The market could misread it as a signal that PBOC is allowing further yuan declines. The best time for band widening is when the spot rate trades closer to the reference rate.”

No worry......unless the U.S. dollar appreciates more than expected.