CNY: Free floating Yuan coming soon - Investec

FXStreet (Delhi) – Research Team at Investec, suggest that IMF’s recent comments about the inclusion of Yuan in SDR basket will soon make the dream of free floating Yuan come true.

Key Quotes

“Over the weekend, comments from Chinese officials were the main event following last week's monetary easing. In addition, the IMF gave a big hint they may soon be including the Yuan as an SDR currency, giving the Chinese currency reserve status and allowing major central banks access to freely swap into it as part of the network of major currencies in the SDR reserves. A major step to a free floating Yuan.”

“On Friday China cut both their main interest rates and bank reserve requirements, responding quickly to ECB policy talk and perhaps giving the Fed sufficient confidence that China has steadied so that the Fed can raise interest rates - although Wednesday's FOMC meeting seems too soon, Investec's Economics team are still comfortable this could be December.”