- "The PBoC surprised markets at the weekend by removing the currency peg to the US dollar. Not surprisingly, the lack of explicit detail in the PBoC’s communication left investors divided about how significant the appreciation is likely to be."
- "Our China economics team’s prescient call on a summer de-pegging before the G20 summit was for a modest appreciation this year and a continuation of the appreciation into 2011."
- "If this change in policy is a precursor to a more flexible exchange rate regime, then it is a welcome first step away from political frictions and towards a more balanced domestic economy in China, and a more balanced global economy as well."
- "In the short run, however, the predictability of the appreciation may actually increase the constraints on policymakers, in our view. The move to a more flexible exchange rate should, in theory, provide more independence to monetary policymakers."
- "However, the predictable nature of the current regime means that any policy tightening could exacerbate capital inflows and lead to even greater accumulation of reserves."
Morgan Stanley Global Monetary Analyst 20100623
No comments:
Post a Comment