From Fixing to Signaling, How China Manages the Yuan: QuickTake

Monitoring how the People’s Bank of China handles its “managed float” system for the foreign-exchange market isn’t easy: The central bank has various tools at its disposal, some public, some hidden. Its thinking is essentially unknowable to outsiders. But there are ways to observe how it seeks to influence the currency. In mid-October, for example, with the yuan surging after its best quarter in 12 years, Chinese officials pulled a regulatory lever, scrapping a reserve requirement that made bett