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Make Yuan Fixes Opaque Again! China Brings Back The CCAF

The fix is in.

Over the course of the last three weeks, China has taken a three-pronged approach to shoring up the yuan. In the face of ongoing trade tensions and the threat of a spillover from the slide in the Turkish lira, Beijing reinstated forwards rules (August 3), chided onshore banks for selling RMB (August 7) and moved to squeeze offshore liquidity (August 16). The yuan has also been buoyed recently by lower-than-expected USDCNY fixings. Here's an annotated chart that shows you the evolution of the PBoC's efforts to manage the RMB: Recent efforts to support the currency appear designed to guard against the psychologically important 7-handle, beyond which some fear capital flight could begin to pick up. It's also possible Beijing believes they've accomplished what they can conceivably accomplish with yuan depreciation when it comes to shielding the economy and are now prepared to move to something akin to "phase 2" in their strategy to fight the trade war. The depreciation in the yuan over the past several months has completely negated the effects of the first two rounds of 301 investigation-related tariffs before they were even fully implemented. Going much further down the depreci
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