Carmignac does not see a devaluation of the yuan

After the People’s Bank of China (PBoC) depreciated reminbi, Jean Medecin, member of the investment committee at Carmignac , commented:

“A 1.9% decrease is not a devaluation. This should be understood in the wider context of the Chinese leadership aiming at making the renminbi a reserve currency, of which the first step is inclusion in the SDR (special drawing rights), and for that the currency needs to be priced with more flexibility.

“Although the move is modest, it has an important signalling impact in that the Chinese central bank is joining the long list of central banks that are either weakening (BOJ, ECB) or not defending (SNB) their currencies’ exchange rate.

“This leave the US as the single largest economy in the world bearing the burden of an appreciating currency.

“This move is obviously having a deflationary impact which is overall positive for rates.”

Carmignac has €58bn of assets under management.

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