Now here’s a renminbi mystery.
Not only did the People’s Bank of China fix the USDCNY cross-rate lower for the eighth time running on Monday at 6.7110, versus Friday’s 6.7172 — the longest run of low fixes since October 2007. But the cross-rate actually traded below the fix itself, hitting a low of 6.7095:
Note the following graph charting the USDCNY rate versus the official fixings (although it appears that Monday’s fixing hasn’t been updated yet):
Despite the need for a Monday adjustment, though, the point still stands – the number of times the USDCNY has traded over or below its daily fix has clearly been on the rise since June.
The PBOC, of course, does allow the renminbi to trade 0.5 per cent above or below the fix during the session.
But it does seem the people’s bank is becoming increasingly comfortable with pushing its previously prescribed limits.
Related links:
Is China Starting To Cave? Yuan Hits New Record Against The Dollar – Clusterstock
Renminbi-yen-dollar collision course – Economist’s View
Yuan-ted: McDonald’s new bond – FT Alphaville
US treads legal tightrope to tackle China – FT