PBOC signals shift to currency basket for valuing the yuan

The People’s Bank of China signaled late on Friday it would measure the yuan’s value against a basket of currencies instead of just the US dollar, The Financial Times reported, citing a statement posted to the central bank’s website. The move comes ahead of a meeting of the US Federal Reserve, as did a previous change to the Chinese currency’s valuation scheme, the fallout of which helped delay the Fed’s plans to raise interest rates. “Announcing a basket peg or a basket reference could also absolve them of the guilt of conducting competitive devaluation,” said Steven Jen at the hedge fund SLJ Macro Partners.