People’s Bank of China won’t use Yuan in trade War

The People’s Bank of China (PBOC) or the central bank of China is going through a precarious time as it is trying to alleviate a problem of bad debt in the country and also making sure that companies can borrow money to invest and thereby drive growth. At the same time, China is involved on a trade war with the US.

PBOC stated in its quarterly monetary policy report that they won’t be competitively devaluing Yuan or use it as a tool to cope with trade pressure and it won’t be injecting ay “strong economic stimulus”. Instead the Bank will use a flexible combination of multiple monetary policy tools and will take a hands-off approach to the foreign exchange market on normal days but intervene if there are massive fluctuations.

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