Wagers that the yuan will slump 10% or more against the dollar are “ridiculous and impossible,” a senior Chinese economic official said Monday, warning that China had a sufficient tool kit to defeat attacks on its currency. “Attempts to sell short the renminbi will not succeed,” said Han Jun, deputy director of the office of the Central Leading Group on Financial and Economic Affairs, at a briefing at the Chinese Consulate in New York.
I suppose he’s probably right. Still, this has an uncomfortable ring of the kind of thing treasury officials tend to say just before a sustained assault on their currency demonstrates that even huge autocracies with lots of foreign reserves aren’t immune to market forces. Stay tuned.