The People’s Bank of China’s bottom line of seven yuan per US dollar has been challenged a number of times since 2015 – the year the Chinese central bank sharply devalued the renminbi (RMB). However, market participants were still largely caught off-guard on Monday morning (August 5) as the psychological barrier, long held by the PBoC since April 2008, was broken, and was not recovered by market close that day.
The RMB’s exchange rate has been under tight management and is permitted to trade 2%
