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Basket shift adds to depreciation pressure

Strong hints from the People’s Bank that it is shifting the focus of its exchange rate management to a trade-weighted currency basket have intensified expectations of further renminbi declines. But there is no sign that the resulting capital outflows are diminishing its ability to determine domestic monetary conditions. Meanwhile, after a dramatic few months, mainland equities are on course to finish 2015 having clocked up double-digit gains.

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