Tracing the foreign exchange USD / CNY (U.S. dollar vs. the Chinese yuan) trading history on March 20 beginning around 12:01 a.m. Beijing time resulted in some rather interesting data. During this time period, the Chinese Internet was roiled with rumors of a possible coup.
First, the Chinese currency is not a free-floating currency, as it is still tightly controlled by the Chinese regime, despite the Chinese state’s desire to have the yuan become an international currency, and used to settle cross border trade.
“Among the currencies of the six largest economies in the world, China’s renminbi is the only one that is not traded easily and accepted worldwide—that is, it is not a hard currency … the renminbi is unlikely to become a prominent reserve currency—let alone challenge the dollar’s dominance—unless it can be freely converted,” said a recent discussion paper on the International Monetary Fund (IMF) website.
The USD/CNY spot showed significant overnight volatility, indicating considerable cross-border capital outflow. The yuan traded down to 6.324 yuan at around 1 a.m., starting to zig and zag up and down between a little above 6.31 yuan and 6.3254 yuan, and was at 6.3189 at U.S. market open.
With the Chinese regime keeping tight control over the country’s currency, this volatility points to a possible fear of upheaval in China, with citizens in the know and having the wherewithal, preparing for a possible run out of the country.
Click this tag to read The Epoch Times’ collection of articles on the Chinese Regime in Crisis. Intra-CCP politics are a challenge to make sense of, even for veteran China watchers. Here we attempt to provide readers with the necessary context to understand the situation.