There are tentative signs that the People’s Bank (PBOC) has resumed currency intervention. Foreign exchange purchases by all financial institutions, a proxy for purchases by the PBOC, turned positive and were the largest in six months in October. The PBOC previously said that it doesn’t want to continue accumulating foreign assets, but it wouldn’t be a surprise if that stance had quietly changed: despite a bout of policy-induced depreciation against the dollar earlier in the year, the renminbi has been one of the strongest-performing global currencies so far in 2014.
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