China is asking banks to avoid yuan market ‘herd behavior’

Bloomberg/Ran Li, Heng Xie, and Tian Chen/8-7-2018

“Any pressure building on the yuan will need to be released in a timely manner and China will not work against market forces, the official told the lenders, according to the people, who asked not to be named as they weren’t authorized to speak publicly. Cross-border capital flows are balanced overall, and China’s fundamentals will provide support for a stable yuan, even though the currency weakened since June, according to the official.”

USAGOLD note:  All of that is carefully worded warning that China will act to defend the yuan and that Chinese banks would be ill-advised to act against the government’s stated objectives with respect to the currency.

 

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