The People's Bank of China (PBoC) fixed yuan at 6.3306 against against the dollar on Wednesday which is 1.6 percent weaker than on the level for the previous day. PBoC was aiming for a devaluation of around 2 percent total. The People's Bank of China told that that there is no any basis for continued yuan depreciation.
Some analytics mentioned "unnecessary political resistance" to the process of the yuan inclusion into the International Monetary Fund's Special Drawing Rights (SDR) basket, for example:
- Goldman Sachs was talking about the following: "While more FX flexibility is likely helpful [for SDR inclusion], a sharp, government-engineered currency weakness against the dollar will likely create unnecessary political resistance to the process."
- BNP Paribas - "Our base case remains that Beijing will continue to resist the devaluation temptation because it would not significantly help Chinese exports and economic growth, could lead to destabilizing capital outflows due to expectations of further devaluation and exacerbate the financial burden of Chinese companies with large and unhedged foreign currency debt."
- Angus Nicholson, IG market analyst - "While further depreciation is likely over the next 12 months, the PBoC is unlikely to see it regarded as a one-way trade."
