, Columnist
China’s Not Feeling the Yuan Market Love
The hand of the government is the only certainty in this currency puzzle.
Beijing’s meddling hand is a constant in Chinese asset prices.
Photographer: iStock/Getty Images
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The relationship between the value of the yuan and the U.S. dollar has broken down in the first few months of 2018, raising questions over the actions and objectives of China’s central bank.
Since unveiling a basket of reference currencies used to set the yuan’s exchange rate in 2015, the People’s Bank of China has largely left it alone.1 The PBOC established the system to move the yuan, or renminbi, away from its historical soft peg against the dollar, aiming to broaden the currency’s value-setting base and reduce volatility.