China Signals Shift on Yuan Policy

China has changed its long-standing rhetoric on its yuan policy, signalling Beijing may alter its course on exchange rates this year under pressure from US Federal Reserve rate rises and US President Donald Trump’s threats of a trade war.

For the first time in an annual government report, the central government included the requirement to ensure the stable global status of the yuan as one of its major tasks, dropping the line “keeping a stable yuan at a reasonable and balanced level” that has been including in report for the past three years.

“The renminbi exchange rate will be further liberalised, and the currency’s stable position in the global monetary system will be maintained,” according to the government work report read out by Premier Li Keqiang at the National People’s Congress on Sunday.

CNBC

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.