PBOC Weaknes Yuan In Bid To Drive Away Speculators

Efforts by China to damp speculation in its currency risks driving away investors just as it’s attempting to open up its capital markets in a once-in-a-generation economic overhaul.

After allowing the yuan to steadily rise in each of the past four years, China’s central bank let it tumble about 1 percent over the past week, the most since at least 2007. Volatility in the currency has jumped the most this month among 31 major currencies tracked by Bloomberg.

Policy makers are moving to drive away speculators as President Xi Jinping seeks to liberalize interest rates, allow more room for the yuan to fluctuate and set up currency trading hubs around the world. Further price swings may squeeze bullish yuan bets that Deutsche Bank AG estimates at $500 billion.

Bloomberg

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