The People’s Bank faces a test when it sets the renminbi fix on Monday morning. With onshore markets closed for the past week, a wedge has opened between where the renminbi last stood onshore and its current weaker position offshore. A fix on Monday that remained much stronger than the offshore rate would signal that the PBOC is still trying to stem the renminbi’s decline. By contrast, allowing the onshore renminbi to weaken might suggest that the PBOC is becoming more tolerant of currency declines as trade tensions with the US continue to escalate. The coming week will also deliver some key data on PBOC foreign exchange intervention, whether stimulus is starting to boost credit, and the health of China’s export sector. And there’s a chance that the US Treasury’s report on currency manipulators will be released at the end of the week too.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services