By Mirza Baig 08-08-2019

Renminbi Falls. But Could This Be Good News?

(4 min read)
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It’s an ‘escalation’, a ‘weaponisation’, even a ‘Pandora’s Box of uncertainty’. You can choose from a range of conclusions on China allowing its currency to fall through 7.0, but you can’t escape the fact that everyone so far has been overwhelmingly pessimistic.

Predictably, EM currencies have fallen sharply, mirroring the reactions to earlier tariff hikes, and investors think there is a template here – a weaker RMB is an indication to sell everything.  Here’s a controversial take, though: RMB devaluation is a reason to buy, not sell EM currencies...

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