Experts and forex analysts expect the Chinese government and the People’s Bank of China to put the yuan on their priority list. The markets want Beijing to focus more on its monetary policy accommodation. While also looking for more ways to support the CNY.
On a panel interview, a group of experts said that Beijing should keep an eye on the yuan especially against the US greenback. Experts believe that the currency will go back up to 7.20 against the buck within next month.
Critics are also debating whether the People’s Bank of China will continue to let the currency rise and gain again. Majority of them agree that the Chinese government will not allow the strength of the yuan to fluctuate wildly.
Yesterday, the Bank of China skipped its reverse repos again, following its steps last Monday. In an official statement, the PBOC cited that there is still enough liquidity in the market to skip it.
The news from yesterday barely caused the yuan to rally against other currencies in session. The greenback to Chinese yuan trading pair just inched down 0.04% or 0.0029 after the news.
Reaching its Strongest
It may seem that the Chinese yuan just barely moved yesterday, but traders say that the PBOC did well for the currency. On Tuesday, The Bank of China managed to list its official yuan midpoint to its best level since August.
The gains reflected the positive development from the US-China trade war negotiations. As Washington and Beijing edge closer to an agreement, the progress falls in favor of the yuan.
Chinese and American diplomats are near to finalizing parts of the trade deal after a phone call discussion on Friday.
The Chinese economy and the yuan’s fates still depend on how Beijing resolves its issues, particularly with the US. An expert suggests that China opens its market to foreign investors to revive the market reform while the negotiation is still in progress.