China’s central bank will use foreign exchange intervention and monetary policy tools to ensure the RMB does not weaken past the 7-per-dollar level in the immediate term, reported the South China Morning Post.
“At present, rest assured they will certainly not let it break 7,” said a Reuters source.”Breaking 7 is beneficial to China because it can reduce some of the effects of tariff increases, but the impact on our renminbi confidence is negative and funds will flow out,” the source added.
The RMB fell to its weakest level since December on Friday, and to within striking distance of the 7 mark last seen during the 2008 financial crisis.
It has weakened 3% in the past month as tensions intensified in the long-running trade war between Beijing and Washington.
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