Has it been a year already since the Rmb’s big tumble? Only joking – if you’ve been watching China forex trends, this one felt more like a decade.
The People’s Bank of China has set the midpoint for the renminbi trading band against the dollar stronger by 0.41 per cent today at Rmb6.62550, the third consecutive strengthening this week. It was also the largest strengthening since June 23, ahead of the UK’s Brexit vote.
Today’s decision holds particular temporal significance as it comes on the anniversary of the fix’s largest-ever move, a weakening that was five times the size of any change prior and still double any since.
That move was prompted according to the central bank, by a change in how the midpoint is set to be more market-based. In practice, the fix has guided the currency weaker while occasionally entering stretches of strengthening that effectively ward off one-way speculation on its continued depreciation.
Today’s fix represents a net weakening of 8.33 per cent since the day before the bank changed its fixing scheme. For a full overview of the last tumultuous 12 months in the redback rodeo, click here.
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