What impact would RMB liberalisation have on Treasuries?

The People’s Bank of China (PBC) recently asserted that its intervention in the currency market would “basically” end. If this proves to be the case, it would represent a significant change of heart given that the central bank appears to have accumulated large amounts of reserves in recent months. We suspect it is more a case of aspiration than reality. But even if we are wrong to be sceptical, we doubt such a shift in policy would pose a major threat to Treasuries.