19 Jun 2023 | News & Feature

Break the mercantilist glass in case of emergency

  • The USD rally following last week’s FOMC meeting turns out to be short-lived, but major Asian currencies such as the CNY continue to weaken as the PBoC seeks to provide more stimulus for its ailing economy.
  • China’s stimulus may mainly benefit the supply side of the Chinese economy, given structural problems such as excess saving and the still-uncertain property sector that would continue to stifle domestic consumption.
  • China’s effort to stimulate its economy could lead to a further dilemma for BI, as the need to slow the influx of Chinese imports clash with the fear of a weakening IDR alongside the CNY.