Photographer: SeongJoon Cho/Bloomberg

PBOC Hasn't Embraced Yuan Gains Like This Since the Arab Spring

China just keeps turning the screws on those strategists -- and investors -- who saw wagering on a fourth year of yuan declines as a sure bet.

Thursday saw the ninth straight increase in the reference rate used by the People’s Bank of China to manage the currency onshore, the longest run of strengthening since the start of 2011, when global markets were being roiled by European debt woes and regime change in the Middle East.

This time around, Beijing is seizing on dollar weakness to cement the yuan’s about-turn as the all-important Communist Party congress looms, punishing any speculators that are left in the process.

The successive fixing increases show that retribution isn’t over yet, and that the PBOC is purposely trying to bring some “noise” to the market to make the yuan less predictable, according to Commerzbank AG strategists. “Conspiracy theory suggests that the authorities are happy to see the market confused.”

— With assistance by Emma O'Brien

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