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Goldman Says Yuan Will Hit 7 as China Avoids Heavy Meddling

  • PBOC may manage sentiment with fixings, funding costs: MK Tang
  • Central bank to sell bills in Hong Kong for first time in Nov.
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China's Yuan Is a Trade War Casualty
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China’s policy makers will likely allow the yuan to hit the key level of 7 per dollar within the next six months without conducting heavy intervention, according to Goldman Sachs Group Inc.

While the authorities may guide sentiment by issuing stronger fixings, they won’t likely sell the dollar heavily to defend the currency as they did in the aftermath of a shock devaluation three years ago, according to MK Tang, a senior China economist at Goldman in Hong Kong. That is because the conditions for the yuan to hit 7 are "more mature" than in the past as capital outflows remain contained, he added.