Guonan Ma: Has a stronger renminbi contributed to financial tightening?

Has a stronger renminbi contributed to financial tightening?
– Yes and no: a stronger RMB on its own tightens China’s financial conditions but is not the principal cause of its observed broad-based financial tightness
by Guonan Ma on 17th December 2014

The People’s Bank of China (PBC), the Chinese central bank, finally cut its benchmark interest rates on 21 November, after easing its policy in a shadow-boxing fashion for more than six months. This is a vindication of our strong and non-consensus view that China ought to ease its monetary policy. There is more Chinese easing to come, in my view.

Read more at Bruegel…

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