Yuan Drops Most Since 2010 on Speculation PBOC Wants Volatility

Yuan Drops Most Since 2010 on Speculation PBOC Wants Volatility. Our view? Introducing greater volatility into the currency markets may be part of the PBoC's plan to adjust its reliance on foreign capital flows and to cool the expansion of the shadow banking system but it is unlikely to be welcomed by China's neighbours who are likely to feel a ripple effect. Considering just how large the shadow banking sector has become, it would be rash to expect the Yuan to continue to appreciate as it has done over the last decade since it is no longer in China's interests to the have the strongest currency in the world.

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