USDCNY: Trading band to widen? – RBC CM

According to Bloomberg, SAFE Vice Head Yang Guozhong suggested widening the yuan’s trading band in an article posted on a Wechat account of the administration-run magazine China Forex, notes the analysis team at RBC Capital Markets.

Key Quotes

“It would be yet another senior Chinese government official calling for the widening in the USD/CNY daily trading band (currently +/-2%). Band widening would have limited operational implications in the near term given that the current band is not a binding constraint, but after a vacuum of nearly two years, it would be a low-cost option for President Xi to score points politically ahead of the Party Congress— domestically and internationally.”