China Will Halt a Disorderly Yuan Slide, Morgan Stanley Says
- ‘Overshooting’ could see the yuan fall to 6.9 per dollar
- Lesson of 2015 is active depreciation can endanger stability
Photographer: Qilai Shen/Bloomberg
This article is for subscribers only.
China is not using yuan depreciation as a tool in its trade conflict with the U.S., and will likely step in to avert any disorderly decline, according to Morgan Stanley.
“We don’t expect policymakers to encourage material RMB depreciation,” China economists at the bank, led by Robin Xing in Hong Kong, wrote in a July 1 note, referring to the renminbi, the official name of China’s currency. “The PBOC could step up intervention if depreciation risk intensifies.”