Ex-PBoC Chief Helps Erase CNY Redline

Former PBoC Governor Zhou Xiaochuan follows another former PBoC official Yu Yongding and various analysts in walking back the redline of USDCNY 7.
Caixin: Exclusive: The Number Seven Doesn’t Mean Much for Yuan, Ex-Central Bank Chief Says

“If you see it (7-yuan-per-dollar) as a (psychological) ‘bottom line,’ that may be a bit of an overreaction,” Zhou said Monday at a closed-door roundtable, which was held by the research institute of the Boao Forum for Asia, Japanese think tank the Asia Pacific Initiative and Caixin.

The walkback of USDCNY 7 began only days after the "redline" rhetoric peaked with CBIRC head said yuan shorts would suffer heavy losses.

Reuters: China's top banking regulator says yuan bears will suffer 'heavy losses'

“Short-term fluctuation of the yuan exchange rate is normal, but in the long-run, China’s economic fundamentals determine that the yuan will not depreciate persistently,” Xiao Yuanqi, the spokesman for the China Banking and Insurance Regulatory Commission (CBIRC), told a finance forum in Beijing.

“Those who speculate and short the yuan will for sure suffer heavy loss.”

Xiao was reading from a script prepared for Guo Shuqing, CBIRC’s chairman and the Communist Party chief of the People’s Bank of China (PBOC). Guo was scheduled to give a speech at the same forum but couldn’t make it due to last-minute arrangements.