Matthews Asia Perspective: China Currency Devaluation Update by Matthews Asia What are the factors that prompted Chinese authorities to recently devalue the renminbi? Matthews Asia Portfolio Manager Teresa Kong, CFA, examines the lead up and implications of this development. Q: What happened this week with China’s currency? A: Since 2005, China’s currency, the renminbi, has had a de facto soft peg to the U.S. dollar (USD). While its central bank, the People’s Bank of China, never explicitly stated how it determines the official daily exchange rate, also known as “fixing,” it was clear that it was largely based on the…
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