2016-04-14

PBoC Meets With Global VIPs, Bigger Yuan Depreciation Coming

Chinese financial media is abuzz following the PBoC's blitz announcement of meetings with key global policy makers on April 13.

The photo below is a screen grab from the PBoC website earlier today. Below is the full list of announced meetings.
易纲副行长会见美联储理事蕾尔·布兰纳德
April 13, 2016, People's Bank of China Deputy Governor Yi Gang attended the G20 finance ministers and central bank governors and the IMF's spring series of meetings during the regular session, met with Fed Governor Lael · Brainard in Washington. The two sides mainly on China-US economic and financial situation and exchanged views.
周小川行长会见美国财长雅各布·卢
During the April 13, 2016, People's Bank of China Governor Zhou Xiaochuan attended the G20 finance ministers and central bank governors and the IMF spring meeting in Washington Regular series met with US Treasury Secretary Jacob Lew. The two sides mainly on policy coordination under the framework of the G20 and China-US economic and financial situation and bilateral financial cooperation and exchanged views.
周小川行长会见美国贸易代表弗罗曼
During the April 13, 2016, People's Bank of China Governor Zhou Xiaochuan attended the G20 finance ministers and central bank governors and the IMF spring meeting in Washington Regular series met with US Trade Representative Michael Froman, on bilateral trade and financial cooperation and other issues and exchanged views
易纲副行长会见德国央行副行长布赫
During the April 13, 2016, People's Bank of China Deputy Governor Yi Gang to attend the Group of Twenty (G20) finance ministers and central bank governors meeting and IMF spring Regular series of meetings in Washington, he met with the German central bank vice governor Bucher. The two sides on key topics this year and next G20 exchanged views.
周小川行长会见世界银行行长金墉
April 13, 2016, People's Bank of China Governor Zhou Xiaochuan attended the G20 finance ministers and central bank governors and the IMF's spring series of meetings during the regular session, met with World Bank President Jim Yong Kim in Washington. The two sides on major issues of global economic and financial situation and China, China and the World Bank exchanged views.
周小川行长会见国际金融公司首席执行官勒奥鲁
April 13, 2016, People's Bank of China Governor Zhou Xiaochuan attended the G20 finance ministers and central bank governors and the IMF's spring series of meetings during the regular session of the meeting of the International Finance Corporation CEO Philippe Le Houérou in Washington. The two sides mainly on deepening financial cooperation, exchanged views on other issues.
周小川行长会见瑞士央行行长托马斯‧约尔丹
During the April 13, 2016, People's Bank of China Governor Zhou Xiaochuan attended the G20 finance ministers and central bank governors and the IMF spring Regular series of meetings in Washington met with SNB Chairman Thomas ‧ Jordan. The two sides mainly on issues in the Swiss financial cooperation and exchanged views.
周小川行长会见美国商品期货交易委员会主席蒂姆‧马萨德
During the April 13, 2016, People's Bank of China Governor Zhou Xiaochuan attended the G20 finance ministers and central bank governors and the IMF spring Regular series of meetings in Washington, met with the US Commodity Futures Trading Commission Tim ‧ Massad. The two sides mainly on issues of Sino-US financial infrastructure cooperation and exchanged views.
易纲副行长会见经合组织首席经济学家凯瑟琳•曼
During the April 13, 2016, People's Bank of China Deputy Governor Yi Gang attended the G20 finance ministers and central bank governors and the IMF spring meeting in Washington Regular series met with OECD (OECD) chief economist • Catherine Mann, both China and OECD on issues under the G20 framework for cooperation, and exchanged views on SME financing.
易纲副行长会见美国副财长内森·席茨
During the April 13, 2016, People's Bank of China Deputy Governor Yi Gang attended the G20 finance ministers and central bank governors and the IMF spring meeting in Washington Regular series met with US Deputy Treasury Secretary Nathan Sheets. The two sides mainly on China-US economic and financial situation and exchanged views.
周小川行长会见国际货币基金组织总裁拉加德
April 13, 2016, People's Bank of China Governor Zhou Xiaochuan attended the G20 finance ministers and central bank governors and the IMF's spring series of meetings during the regular session, met with IMF Managing Director Lagarde in Washington. The two sides mainly on IMF quota and governance reform, improve the global financial safety net, expand the use of SDR issues such as exchange of views. PBOC Deputy Governor Yi Gang, Lipton, IMF First Deputy Managing Director attended the meeting.

The article at iFeng comments: 周小川昨天会见了这7个大人物 人民币近期要有大动作(更新)
Wall Street Intelligence noted that there is no significant negative factors under the conditions of today's Bank of China slashed rare RMB against the US dollar exchange rate parity (depreciation compared with the previous trading day big 300 points). This seems to indicate the renminbi will soon have big moves.
The quiet period in financial markets is seen as an opportunity for yuan adjustment:
China's central bank is bound in the near future, we feel the current global trend of funds moving different, the recent re-promote the RMB exchange rate reform. Over the past six months, each time more foreign exchange reform will cause fluctuations in exchange rates; Because still have to rely on exports in the global emerging market currencies are devalued, the central bank announced a reform on the system of measures, which should more be seen as fierce devaluation excuse . But after the Fed rate hike cycle started, but then the situation has brought considerable foreign exchange reform the operating space.

With the dollar index is experiencing its longest ever upward trend, a number of Fed officials to begin marketing the Fed should raise interest rates in April idea (market everyone wrong understanding of Yellen's dovish stance) but China's central bank was on the Federal Reserve may raise interest rates in April, has warned.

China's central bank warned that if the Fed to raise interest rates in April, the Chinese central bank will raise interest rates the Fed's action to make the appropriate measures. In recent months, the RMB devaluation surprise to the market a huge shock. China's central bank in January 7th sharply down the RMB exchange rate, China to the United States in order to convey a clear message: China does not want the Fed to raise interest rates in order to bring a new round of China's capital flight situation.

We believe China's central bank will seize the global financial market is relatively quiet time, promote the realization of a more substantial two-way fluctuation of RMB against the US dollar.

The dollar's recent weakness, making the yuan against a basket of currencies to weaken did not cause the global market volatility. We expect the yuan to a basket of exchange rate will continue to slow to adjust, not only through the effective depreciation versus the dollar, but also versus the euro and the yen.

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