Why China may play the devaluation card

The Chinese economy is not only in decline mode, but is “possibly in worse shape than most officials perceived”, says Kay Van-Petersen, Asia macro strategist with Saxo Capital Markets. The strategist believes so because of the timing of the official rate cut. It happened bit too soon after the People’s Bank of China reduced in April the reserves requirement ratio (RRR) for banks by 100 basis points. Whilst Van-Petersen is not advocating that a renminbi devaluation is imminent, “what is clear” –he says– “is that there are more and more appealing aspects to some form of devaluation and these warrant consideration”. To read more visit: (VIEW LINK)