End of an era

Just a brief one after today's other post was written (but not yet published!)

Today marks the end of an era, as China has devalued the RMB by 1.9% via today's fixing, by far and away the largest official depreciation since the currency started to revalue a decade ago.   Indeed, today's devaluation very nearly matches, in percentage terms, the revaluation that accompanied the shift to a CNY appreciation  policy in 2005.

Sadly, sans Bloomberg Macro Man cannot show a time series graph of the reference rate; however, a chart of the offshore CNH market gives you a small idea of the impact:

Moreover, henceforth the parity calculation will be done a little differently, as highlighted here.   A ploy to make ti more market-driven to get into the SDR?  Possibly.   A throwing of the towel to acknowledge the relatively dire straits of the economy?   Almost certainly, to a degree.

As everything begins to reprice to where it was a dozen years ago, it sure feels like the commodity currency complex has a ways to go still....
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