01-11-2016, 12:59 PM
In a week that global markets were rattled over China’s haphazard efforts to halt equity sell-offs, the PBoC shifted the daily fixing rate that sets the renminbi trading band to its lowest level in four years, while it emerged that the country’s forex reserves dropped by $108bn in December. Simon Derrick, head of BNY Mellon’s markets strategy team, said the PBoC should be given some credit for trying to push on towards a more flexible exchange rate policy, a condition of winning reserve currency status from the International Monetary Fund. “By not allowing the currency to weaken further against the euro and a range of other currencies, they are fairly deliberately avoiding getting engaged in a currency war,” said Mr Derrick.