PBoC cut in renminbi fix prompts market volatility
Equities slump and onshore/offshore exchange rates diverge
The People's Bank of China (PBoC) cut its renminbi fix by 0.51% today (January 7), triggering a slump in the country's stock markets that saw trading suspended for the second time this week.
It fixed the yuan at 6.5646 against the US dollar today, down from 6.5314 the day before. The PBoC allows the onshore yuan to trade 2% either side of this point.
Shortly after the announcement, the CSI 300 Index fell 7%, triggering a so-called ‘circuit-breaker' that suspends trading for the remainder of
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