Chinese authorities said in a statement on Friday that they may add a “counter-cyclical factor” to the yuan’s daily fixing, reports Bloomberg.
The move would give authorities more control in the daily fixing, and a more tightly-managed currency would add welcome stability as the deleveraging campaign continues. But the move would also be a reversal of previous statements from Xi Jinping promising to give markets a central role in exchange rates.
“The counter-cyclical adjustment factor sounds like an increased role for the fixing to be nudged away from where markets would set it,” Sean Callow of Westpac Banking Corp was quoted by Bloomberg as saying. “The authorities’ actions give the impression that they are more worried about yuan stability than declared in their public statements.”