CNY At A Glance: Is The Worst Of China's Depreciation Pressure Over?

Summary

• Short-term depreciation pressure on the yuan has eased as external factors have outweighed domestic issues.
• We generally expect that external developments will continue to outweigh domestic drags, and the CNY should gradually move stronger.
• We expect the CNY to remain a low-volatility currency relative to other Asian FX.

Daniel Grizelj

By Lynn Song

Counter-cyclical factor has moved back toward 0 amid CNY recovery

The People's Bank of China utilises a counter-cyclical factor which is an adjustment to their daily fixing during periods of high volatility. This tool is