Looking at the change from 2017 to now, it basically manifests the central bank has rarely traded #forex directly in the market nowadays (Figure 1), said Huang Yiping, CF40 Academic Committee Chairman.1/5 cf40.org.cn/uploads/201909….
The so-called “managed floating” refers to the management through “counter-cyclical factors”. The current #forex management system has changed drastically. Some scholars have even asserted that, in the past one or two years, we have almost achieved clean float.2/5
Let’s look at another indicator, #exchangerate flexibility. From the perspective of 12- month moving average volatility, volatility has been increasing since the end of 2010 (Figure 2), 3/5
At beginning of 2019, volatility of #RMB exchange rate almost converged with that of the major global reserve currencies like the #US Dollar, #Japanese Yen, and #Euro meaning the flexibility of our exchange rate has been dramatically improved. 4/5
Regarding the recent changes in the #exchange rate, I reckon “management” is to reduce short-term, excessive fluctuations. RMB had faced large depreciation pressures. Some management measures taken were to avoid excessive depreciation rather than promoting its depreciation. 5/5
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