Thread by @ChinaFinance40

#China has taken a managed floating exchange rate regime since 2005 in a bid to
maintain exchange rate at stable and reasonable level, but PBoc has largely
reduced intervention of forex since 2017 and a “clean float” has been basically
achieved, according to Huang Yiping.

The volatility of the value of #Chinese #yuan has been increasing since the end of
2010, and in early 2019,the volatility in yuan got quite close to that in
other major reserve currencies like US dollar,#Japanese yen and euro, an
important sign of increase in flexibility of yuan.

President Trump’s sudden and unilateral announcement to impose additional 10% tariffs during ongoing China-US #trade negotiations, negatively impacted market confidence on RMB, which brought new pressure on yuan. It’s unfair to name #China a currency manipulator in such a context

Also, thinking that a weak currency can support economy is “outdated”. A weaker currency can increase exports as the prices of goods become more competitive,but it's opposite when it comes to finance – a weaker currency will lead to #capital outflows and roil capital markets.

What China should do?Speeding up the process toward a fully floating exchange rate regime;improving policy transparency;continuing reform and opening;promoting competition neutrality; & shoulder more global economic responsibilities. His full speech at mp.weixin.qq.com/s/_SJO9IlZK0-y…