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13 Jan 2016
China: Sending a strong message to RMB speculators - HSBC
FXStreet (Delhi) – Research Team at HSBC, notes that the offshore CNH has recovered sharply, as USD-selling intervention by the PBoC tightens offshore liquidity.
Key Quotes
“A shrinking CNH deposit pool and the suspension of some onshore-to-offshore RMB funding channels in recent months have helped too. We believe China is sending a strong message to speculators and trying to stabilize RMB depreciation expectations. A narrower basis also demonstrates its commitment to full convertibility. But such periods of policy-induced stability in the RMB is unlikely to be long-lasting as policymakers are embracing a more flexible FX regime. High volatility is the theme for the RMB this year.”
Key Quotes
“A shrinking CNH deposit pool and the suspension of some onshore-to-offshore RMB funding channels in recent months have helped too. We believe China is sending a strong message to speculators and trying to stabilize RMB depreciation expectations. A narrower basis also demonstrates its commitment to full convertibility. But such periods of policy-induced stability in the RMB is unlikely to be long-lasting as policymakers are embracing a more flexible FX regime. High volatility is the theme for the RMB this year.”