PBOC Says Yuan Can't Be Used to Offset Commodity Inflation

May.27 — The yuan exchange rate can’t be used as a tool to spur exports or offset the impact of commodity price rises, according to a PBOC statement. Bloomberg’s Enda Curran has more on “Bloomberg Surveillance.”

11 thoughts on “PBOC Says Yuan Can't Be Used to Offset Commodity Inflation

  1. George Soros used to say
    the UK Pound is a manipulated currency and its being held up by the British Government..

    the rest is history.

    Somehow, the British Government were okay….

  2. I suspect there will be a time when the ccp will desire usdcny to be 1. More fitting for a global power than to be a mere exporter.

  3. So the merit is: When China exporting goods, RMB need appreciating. When China importing materials (Copper, corn, oil, etc), the RMB need depreciating. I got some seashell to sell these wankers

  4. US Congress can makes economic sanctions on Russia and gas pipeline North Stream 2 on Ukraine request.

  5. And now some Wall St people are crying much because Yuan is appreciating and getting more inflows which can of course affect the coming inflows going to US by literally sucking global savings.

    The following scenarios and realization can happen:

    CHINA realizes that post-pandemic, globalization and trade will not return back pre 2008 considering that a very hint of nationalization and surge of protectionism from OECD to developing countries, so exports are just a drag on its economy as what is happening since post 2008 financial crisis. Just look at the midget net balance of trade of CHINA in the recent years which now less than 2% of its GDP. The country will resort to capital inflows to support its deficit in the coming years in which they will attempt to slash their very high savings rate as the population also ages.

    This will create shockwaves in the global economy as CHINA instead of being a major source of global savings will now turn to get a share with other OECD countries in sucking global savings into their respective economies. This may cause inflationary effects on OECD countries to some extent which might give mixed results since most of OECD countries are heavily in debt and relying so much of low interest environment. Now they will be forced to raise interest but the problem is it will not only jolt the stock market but also heavily affect the government or federal budget as debt service will rise. And there is also a problem that real yields in every OECD countries are basically negative if not almost zero even if you account the inflationary scenario. No sane investors want to put their money on those.

  6. Lol. When the Yuan depreciates these speculators decry of manipulation now that Yuan is surging and appreciates these speculators again crying for manipulation. Lol. Each country can manipulate its currency to some extent (cough Bank of Japan yield curve control, cough Fed QE). It is a matter of who is hurting or not and apparently these greedy FX speculators cannot do earn much without speculating much of USD-CNY.

    History tells you that there is a merit also with stable currency and capital controls especially if the market is not that developed yet and can be easily be swayed by the likes of Soros (pointing to SK and Asian Financial Crisis 1998).

    Lol. As Fed like it to say USD is my currency but it is your problem (pointing to imported inflation). Now why not PBoC can say my currency my rules. Lol.

  7. Nobody wants that toilet paper; USD is still king, sell them more treasury debt 1 trillion is no longer enough. And the yen carry trade can only go so far.

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