Emerging market currencies tend to move more closely with the renminbi when market forces play a more decisive role in the Chinese currency’s price-fixing mechanism, a Bank for International Settlements working paper finds.
BIS senior adviser Robert McCauley and senior economist Chang Shu say the renminbi fixing mechanism has gone through three stages: “transition”; “basket management”; and “countercyclical management”.
From February 2016 to May 2017, or the “basket management period”, the Peo
