Meet China's New Currency Regime; It Looks a Lot Like the Old One
'Yuaniversary': Has the Devaluation Been a Success?
A year ago China revamped its foreign-exchange policy to increase the role of market pricing and make its currency less closely tied to the dollar. New research suggests it might as well not have bothered.
The August 2015 devaluation triggered the yuan's biggest one-day drop in two decades, as policy makers cut the reference rate by a record 1.9 percent. The central bank also said the currency's fixing would become more aligned with supply and demand, and later in the year it unveiled a new currency index known as CFTES RMB to measure yuan fluctuations against a wider selection of peers than just the dollar.
These changes were supposed to usher in a new era of exchange-rate policy for China. They didn’t, according to Societe Generale SA analysts led by Jason Daw. Instead, the relationship between the daily yuan fix and the dollar is "as strong as ever," they said.