ANZ’s Liu Li-Gang Says Yuan Band Boosts RMB Volatility
“This move is consistent with its recent measures to fast open China’s capital account. As China experiences two-way capital flows, the renminbi’s volatility will naturally increase. Allowing a flexible exchange rate will enhance PBOC’s monetary policy independence and make its policy more effective.
‘‘Now Chinese residents, firms, and FIs will have to live with a more volatile renminbi exchange rate and start to use hedging instruments. As such, Chinese commercial banks will have a new source of revenue. Indeed, this move is an important step to help improve the onshore renminbi market efficiency.”
To contact the Bloomberg News staff on this story: Zheng Lifei in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Panckhurst at email@example.com
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.