The PBOC is profiting from defending the CNY peg รป but that's no reason to keep it

China''s peg to the dollar: more sustainable than realized, but still a distortion, argues StanChart''s senior economist.

The debate about the renminbi rages on. But while economists debate the pros and cons of keeping the peg, widening the CNYUSD band or a large, one-off revaluation, little attention has been paid to the financial consequences for the People's Bank of China as it defends the current regime. These are important and our estimates suggest that the current regime is more sustainable than it might at first appear.

Hot and cold capital flows into China last year caused the FX reserves to rise $202 billion. Building a strategic stock of capital has important benefits. One can use it to recapitalise banks, buy oil from overseas or keep it for...

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222