PBOC's Easier Grip on Yuan May Stem From Trade-Weighted Strength.

The Chinese yuan's strength against other major currencies in China's trading orbit is at odds with China's struggling economy and threatens the competitiveness of its exports. The People's Bank of China (PBOC) has recently taken steps to weaken the yuan's reference rate, indicating a shift towards allowing for more currency flexibility. However, this strategy risks fueling capital outflows and undermining consumer confidence. The PBOC has the ability to engineer a gradual depreciation of the yuan, but setting a firm line for the currency's value may have negative consequences. [Extracted from the article]