ING’s Chris Turner highlights that the People’s Bank of China is keeping USD/CNY steady near 6.90 during the current crisis, helping the renminbi outperform peers such as the Indian Rupee, Japanese Yen and Euro. He argues this reflects China’s desire to position the renminbi as a long-term store of value and expects USD/CNY to remain near 6.90.

PBoC stability supports renminbi

"As has often been the case during global crises, the People's Bank of China is again keeping USD/CNY relatively flat – this time near 6.90."

"For a change, its control of the currency is welcomed by the international investor community, with the renminbi avoiding the aggressive drawdowns seen by many other currencies during this crisis."

"The renminbi is not just up 3.5% against the likes of the Indian rupee this month."

"This control of the renminbi reflects the local desire to position the renminbi as a long-term store of value that is consistent with the renminbi's global reserve currency status."

"We would not be surprised to see USD/CNY continuing to trade near 6.90 throughout this conflict."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)