Yuan Should Be Avoided for Now, UBS Wealth's Tan Says

The transcript discusses the People's Bank of China's (PBOC) response to the yuan's depreciation amid US-China trade tensions. It highlights the external pressures on the yuan, market reactions, and the potential impact of US midterm elections. The PBOC's use of various policy levers, including fiscal and monetary measures, is examined, with a focus on avoiding excessive currency devaluation. The discussion advises caution in CNY exposure due to ongoing trade discussions and market volatility.

What is one of the main reasons for the yuan's depreciation according to the first section?

• Increase in Chinese exports

• External selling pressure due to US-China trade tensions

• Decrease in US interest rates

• PBOC's intentional devaluation

How does the market view the correlation between the dollar-yuan exchange rate and emerging market peers?

• As a negative correlation

• As a stable relationship

• As an irrelevant factor

• As a positive correlation

What could potentially influence the US-China trade discussions according to the second section?

• US midterm elections

• European Union trade policies

• Chinese New Year celebrations

• Japanese economic growth

What is one of the policy levers mentioned in the final section that the Chinese government is using to stabilize growth?

• Currency devaluation

• Fiscal easing

• Increasing tariffs

• Reducing exports

Why is the market cautious about the magnitude of yuan depreciation?

• To maintain high interest rates

• To avoid increasing exports

• Because of the range of policy measures being employed

• Due to potential inflation