CFETS RMB Index slumps to record lows

The CFETS (China Foreign Exchange Trading System) RMB Index hit fresh record lows amid speculations that global policy makers are taking advantage of the recent dollar weakness to boost exports competitiveness, Bloomberg reports.

A Bloomberg replica of the CFETS RMB Index, which measures the yuan against 13 exchange rates, fell to 93.78 on Friday, the lowest since the gauge was introduced in December.

Economist at Commerzbank, as cited by Bloomberg, noted, “The PBOC is intentionally allowing a weaker yuan as it hasn’t done any great intervention to prop up the exchange rate. A weaker currency makes more sense for China now as it helps the economy."