China could find itself in a bit of a bind if the yuan continues to weaken, as the trend could...

|By:, SA News Editor

China could find itself in a bit of a bind if the yuan continues to weaken, as the trend could prevent the PBOC from lowering interest rates to boost the slowing economy, Moody's says. Any rate cut could prompt further capital outflows - which hit a net $71.4B in Q2 - and so hurt efforts to speed growth up. The central bank has recently been propping up the yuan in the market by selling forex reserves.