Yuan devaluation is not to boost export: PBOC
Play
The yuan devaluation is not aimed at boosting the export sector, said the People Bank of China (PBOC) at a press conference today.
The affirmation eased tensions in the currency market, as investors were uncertain how much yuan would fall against US dollar after three consecutive days of devaluation.
At the press conference, the central bank clarified its stance on the renminbi (yuan) exchange rate, citing that market-based pricing is clearly a priority in the change in fixing mechanism.
UOB said in a research note that the bulk of the adjustments on China’s FX appears to be over for now and that should help calm market sentiment as the authorities have no intention to set the yuan on a depreciation trend.
The bank expected the yuan to end the year at 6.45 per US dollar, which means a 4 per cent depreciation from 2014, a similar magnitude of the annual appreciation pace seen in the past decade.
Key points from PBoC at the press conference:
