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[CC may contain inaccuracies] The good of this new tool about you know
this 20 percent risk reserve requirement

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for ethics for sales is that going to
work.

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How long lasting could this impact be.
Thank you for having me here.

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So definitely this 20 percent reserve
charge is gonna add the costs to people

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and banks so that I want to assure to
see the nature of the loan.

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Why in the forward market.
So I think definitely that's going to at

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least that due to some speculation in
the short term.

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But you know with U.S.
dollar yields right now are much higher

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than you see in nature Jersey.
And why yields.

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I think market participants will still
find that incentive to a lower dollar

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CNY in the forward market anyway.
What do you think is the high for this

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cycle.
On dollar offshore dollar onshore.

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So right now we're forecasting seven
point a 20 by year end.

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Next year we could be there by the end
of this week.

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Yeah that's also possible because we're
seeing still very fierce dollar stress

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the strengths right now by the.
I think you know in the short term if we

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look at the last of pick off dollar room
and B during the trade war 7 10 20 seems

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like a resistance level to the market
with techs neck test the next.

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Are you expecting more signs of
intervention for the same way before

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then.
I mean if the stronger fixings are not

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really able to turn the tide you know
what other tools are they have.

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Yeah.
So this time you'll know if we look at

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the last months what the people what
they have done.

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Right.
So they have been adjusting the daily

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fixing.
Every day they have been cutting that

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affects triple R and now they do this 20
percent reserve charge.

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But I think that they have more policy
tools.

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So for example you know even if they
have lowered fixing every day and

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looking at onshore offshore spread as
well as there affects reserve data we

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haven't really seen much signs of very
meaningful direct intervention from from

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the central bank much different from
2050.

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Yeah exactly.
I think one reason is that you know the

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CFS index which means that you're in the
room in base evaluation against a basket

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of currencies has been stable and
elevated above 100.

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So this can make the PPO with a less
resistance to a higher dollar and maybe

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this time.
But of course if we start to see like a

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quick fall in the CFS index then the PBA
will see May may start to show more

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office power.
So a direct intervention through a more

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triple effects report.
Our cuts each other.

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What's what else are you watching.
Apart from everything we talked about

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all the tools all the levels you're
watching is there anything we're

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ignoring at this point in time.
You think it's important.

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I think the party Congress can can can
be a very important event to look at

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because right now you know I think the
root cause for renminbi is weakness is

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that the domestic economy is just not
strong enough to support their currency.

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So I think if we have more good news
from either the policy end or the Covid

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end to some relaxation then that's going
to boost the sentiment and help the

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currency.
Should I expect other Asian currencies

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to also kind of continue on this kind of
devaluate competitive devaluation or do

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you think anyone's going to start
stepping up our defenses like the PBR.

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I see too.
Yes.

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So I think right now it's really the
dollar strength that the dollar strands

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that have been driving the whole
picture.

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Right.
So far for Asian currencies similar to

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renminbi they are facing multiple how to
win.

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So you have a very hawkish fed.
And at the same time the export picture

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export picture isn't looking so great
for Asian exporters.

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And at the same time renminbi is no
longer a very stable anchor.

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So I think a more depreciation is
possible for our Asian currencies.

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You just said that now you know central
banks are showing their hand.

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So market participants may be more
cautious in terms of testing the

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offsite.