China’s central bank PBOC unexpectedly depreciated CNY by 4.4% within three days in August and then stabilised with PBOC intervention. We forecast that USD/ CNY stands at 6.6 and 6.8 by end- 2015/2016. We firmly believe we are moving from “Nothing is possible in CNY’s rigidity” to “everything is possible to reflect the decelerated economy”.
Amundi Hong Kong Chief Economist
The RMB (onshore) has depreciated by 1.6% vs. USD ytd. (-5.8% since August 10th, the day before the announcement of the RMB devaluation). It is however interesting to note that while the trade-weighted USD has continued to appreciate since August 10th (+4%), the trade-weighted RMB has depreciated (-2%).
Head of Macroeconomic Research