In recent weeks, several journalists and analysts have started to ask questions about China’s currency — the yuan (CNY). These questions have centred around whether the yuan is set to depreciate in a significant manner. Their thinking goes along the following lines. They cite China’s subdued growth and inflation dynamics and suggest that rate cuts and modest yuan depreciation will improve China’s GDP growth. China’s growth profile has slowed substantially in recent years and, despite several incremental stimulus measures last year, overall growth dynamics remain on the weaker side — particularly in the consumer and property sector. The property sector’s…

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