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Goldman Sachs: China Has to Allow RMB to Depreciate

The Chinese government backed Hong Kong news platform Phoenix New Media recently reported that Goldman Sachs President and COO Gary Cohn spoke about China at the World Economic Forum (Davos). Cohn said that China may have to allow its currency to depreciate. Cohn expressed his belief that the depreciation is needed to solve the issue that the Chinese economy is slowing-down. He said China will “have to do something in the next six months.” Chinese Vice President Li Yuanchao also commented at the Davos Forum that China does not plan to depreciate the RMB and that, in addition, there is no policy currently in place for depreciation to occur. The Chinese currency has suffered a volatile new year so far. The Chinese central bank unexpectedly adjusted down the on-shore exchange rate and the RMB depreciated 1.5 percent in the first week of January. This raised a lot of doubts among the financial community about the Chinese government’s strategy.
Source: Phoenix New Media, January 23, 2016