There have been a lot of false starts, but once again some yuan-hike murmurings are coming out of China:
In another sign that Beijing might be nearing a consensus about appreciation, the central bank set the yuan’s daily mid-point, its key reference rate, at 6.8259 to the dollar, the highest since May last year, though still well within the tight range of the past 20 months.
“We should keep the yuan basically stable at a balanced and reasonable level, while strengthening analysis and monitoring and making announcements about risks in a timely manner to reduce exporters’ risks and losses,” the NDRC was quoted as saying by the official China Securities Journal.
When and if it happens, it will be a surprise for many, but at the same time preparations will have to be made ahead of time. So one shouldn’t completely discount government actions, even if this feels like the same old song and dance.
Note this comes right after Geithner’s ‘no, it’s China’s choice’ move yesterday. Yes, we know, correlation doesn’t necessarily imply causation.
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