December 2, 2008
Renminbi Devaluation Underway
Yuan Falls Most Since End of Currency Link Before Paulson Visit
“The currency declined 0.7 percent after the Peopleââ¬â¢s Bank of China set the daily reference rate at the weakest level since August, prompting speculation policy makers favor a depreciating currency to spur demand for Chinese goods.”
China is looking out for Number One.
As you can see from the spread chart below, the non-deliverable forwards shifted in late September, so the market has been expecting this policy change for a good long while now.
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