After some sources were quoted as citing that China’s central bank will not let Yuan decline past 7 to the dollar, Reuters reports additional comments from those three people familiar with the central bank’s thinking.
A source said: “At present, rest assured they will certainly not let it break 7.”
“Breaking 7 is beneficial to China because it can reduce some of the effects of tariff increases, but the impact on our renminbi confidence is negative and funds will flow out,” the source added.
A second source familiar with the PBOC’s thinking said the monetary authority would be fine with the Yuan weakening to 7 on fundamental factors but would act to prevent speculative short-selling of the currency.
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