PBOC willing to let the yuan weaken this year to 6.8 per dollar - BBH

Research Team at BBH, notes that the markets were a little spooked by a newswire report that the PBOC is willing to let the yuan weaken this year to 6.8 per dollar. 

Key Quotes

“The report cited unidentified sources. With the yuan trading around 6.65, that would imply another 2.2% move.  As it stands, the yuan has weakened about 2.3% against the dollar and so the implied depreciation for H2 would simply match what we’ve seen in H1. Hardly earth-shattering.  If the dollar rallies in H2, we would expect the yuan to reflect this.”