Weekly comment MM Prime TFI - August 17, 2015
Last week the People's Bank of China (PBOC) made the surprising decision to devalue the yuan. The renminbi has suffered its biggest drop since 1994. It was believed that the decision was aimed at strengthening Chinese exports, which has weakened recently. A cheaper yuan will help make Chinese exports more attractive and boost China’s economic growth. The PBOC explained that the devaluation was caused by a significant shift in how it manages the yuan by allowing market forces to play a bigger role in valuing the currency.