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14 Dec 2015
New Renminbi index: A refinement in China’s economic policy transparency - TDS
FXStreet (Delhi) - Sacha Tihanyi, Senior EM Strategist at TD Securities, suggests that the publication of a new renminbi index should be considered a refinement in China’s economic policy transparency and communication strategy, as it relates to renminbi.
Key Quotes
“Ultimately this represents a formalization of a policy focus that appears to have been in effect since late 2014 / early 2015 when CNY trading against the USD became less correlated with the CFETS index.”
“We believe that a refocus on the index as a measure of renminbi valuation makes it easier for China to allow for CNY depreciation against the USD, a factor which may also negatively impact Asian currencies, particularly KRW and TWD.”
Key Quotes
“Ultimately this represents a formalization of a policy focus that appears to have been in effect since late 2014 / early 2015 when CNY trading against the USD became less correlated with the CFETS index.”
“We believe that a refocus on the index as a measure of renminbi valuation makes it easier for China to allow for CNY depreciation against the USD, a factor which may also negatively impact Asian currencies, particularly KRW and TWD.”