China won't use the yuan to 'aggressively' attack the US, even as trade tensions between the world's 2 largest economies rise, Morgan Stanley says
Morgan Stanley does not think China will use its Yuan"aggresively" against the US even as trade tensions mount between both countries.
Morgan Stanley chief Asia economist Chetan Ahyda said:"China doesn't want its currency to be that volatile."On Wednesday, China threatened tit-for-tat sanctions for the US signing of the Hong Kong Autonomy Act, which in turn followed China's imposition of a new security law in Hong Kong.As trade tensions between US and China have flared up again, Morgan Stanley is confident that China's currency will not be used as a tool to attack the US.
Speaking to CNBC Wednesday, Morgan Stanley chief Asia economist Chetan Ahya said:"I think there's another trend that's emerging ... China doesn't want its currency to be that volatile, or be seen to be a currency which is not seen to be stable enough to be a long time venue for being a reserve currency."China will not"aggressively" use Yuan to attack the US
Ahya said:"China will, we think, not be using its currency aggressively, even if there were to be new rounds of trade tensions emerging. "We think they will be more focused on, in the context of geopolitical developments, trying to keep it more stable so that it can be seen as a stored value currency where people are enticed to get into Chinese assets."draconian security lawChina said the rule was needed on security grounds, but critics of the law say it violates Hong Kong's"One Country, Two Systems" policy, that has been in place since 1997.
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