The Popular Bank of China is trying hard to protect its currency from the current sell-off. Ever since it broke away from the dollar peg switching to a trading basket reference, the currency’s depreciation has gained momentum as its off-shore value continues to deteriorate. With the aim of bridging that gap, the PBoC raised the rates in the off-shore market beyond 60% last week. On Monday it imposed a 17.5% mandatory set aside for off-shore money holdings.
BARCLAYS | On 1 December 2015, the day after the IMF Board voted to include China’s currency in its Special Drawing Rights (SDR) basket, we hosted a conference call with Barry Eichengreen, a professor at Berkeley and an expert in the field of international economics , to put China’s SDR inclusion in perspective. Highlights from the call are below.