No interference in exchange rate sign of govt's faith in the economy

THE RENMINBI'S EXCHANGE RATE against the US dollar dropped to a decade low of 6.97 last week before a quick rebound to 6.89 by Sunday. Guancha.cn comments:

Some people think that it will only be a matter of time before the renminbi exchange rate to the US dollar hits 7, which is highly possible given the Chinese government's noninterference policy.

And while the depreciation of the renminbi - a result of multiple market factors - can effectively hedge short-term risks stemming from the rising costs of exports after the United States raised its tariffs, its costs are obvious - both the pressure of capital flight and the resistance against continued prudent monetary policies will build up.