Be It Bullish or Bearish, China's Currency Reform to Have Moderate Impact on Crude Prices

摘要

China's remarkable economic growth over the past decade or more and its concomitant impact on crude demand and prices have made policy shifts in the world's second-largest energy consumer closely watched events. So when the People's Bank of China (PBOC) on Jun. 19 announced it would re-loosen the peg of its currency, the yuan, to the US dollar, a flurry of commentary emerged regarding the impacts. In 2005, China launched a managed-float foreign exchange regime built on a diversification of its holdings, but backtracked alongside the 2008-09 credit crisis and imposed a firmer dollar peg.